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2012 SEAISI Economic, Environmental &
Safety Seminar
Nov. 27-28, 2012 • Bangkok, Thailand
Philippines
COUNTRY REPORT
Presented by: JOEL T. RONQUILLO
Philippine Iron and Steel Institute (PISI)
ECONOMIC UPDATES:
• The Philippines apparent steel consumption
reached 5.1 million MT in 2011, a 24%
growth compared to 4.1 million MT in 2010.
• One of the key economic trends is that the
GDP posted a 3.7% growth in 2011.
• The Philippine government forecast is for
GDP to grow to 5-6% in 2012.
GDP Growth by Sector, 2009-2011*
2009
2010
2011
1.1
7.6
3.7
Agriculture, Fishery and Forestry
(0.7)
(0.2)
2.6
Industry
(1.9)
11.6
1.9
Mining and Quarrying
16.1
11.4
4.1
Manufacturing
(4.8)
11.2
4.7
6.8
14.3
(6.4)
(0.9)
9.9
(2.8)
3.4
7.2
5.0
(0.1)
1.0
3.9
Trade
1.4
8.4
2.6
Finance
5.5
10.1
6.6
Ownership of Dwelling and Real Estate
4.1
7.5
7.7
Private Services
6.5
8.4
6.7
Government Services
6.1
5.8
3.2
GROSS DOMESTIC PRODUCT
Construction
Electricity, Gas and Water
Services
Transport, Comm., Storage
* Revised figures from National Economic Development Authority
Performance of the Steel Industry in 2011
Apparent steel consumption reached 5.1 million MT in 2011,
growing by 24% compared to 4.1 million MT in 2010.
.
Key Developments in 2011
STEEL DEMAND
 Decreased government spending on infrastructure
 Recovery in the real estate sector
STEEL SUPPLY
 Significant increase in local billet production
 Continuing shutdown of Global Steel (formerly National Steel
Corp.)
 Continuing displacement of locally manufactured light
sections, GI/PPGI sheets, CRC, HRC & pipes by imports
Comparative Steel Demand
2010
2011
Construction
Construction
Light &
Heavy
Others Packaging Fabrication
Light &
Heavy
Fabrication
Others
Packaging
Summary of Key Steel Statistics
In Metric Tons
2011
2010
Yr-Yr
Change
CRUDE STEEL PRODUCTION
1,200,000
1,050,000
14%
FINISHED STEEL PRODUCTION
2,902,140
2,542,420
14%
FINISHED STEEL IMPORT
2,698,764
2,086,509*
29%
FINISHED STEEL EXPORT
-
104,836
5,158,761
4,114,185*
APPARENT STEEL CONSUMPTION
Adjusted for double counting
*2010 figures adjusted based in updated import statistics of tin products
24%
Apparent Consumption:
SEMI-FINISHED STEEL
In Metric Tons
2011
2010
BILLETS
Production
Import
Export
Apparent Consumption
SLABS
Production
Import
Export
Apparent Consumption
Yr-Yr
Change
1,200,000
1,120,010
2,320,010
1,050,000
1,169,998
2,219,998
-
-
14%
(4%)
4.5%
-
Sources: Bureau of Customs (BOC), Department of Trade and Industry (DTI) and Industry Sources
Apparent Steel Consumption:
In Metric Tons
2011
LONG PRODUCTS
Production1&2
Import
Export
Apparent Consumption
FLAT PRODUCTS
Production1
Import
Export
Apparent Consumption
Total Long & Flat Products
Yr-Yr
2010
Change
2,420,000
703,520
3,123,520
2,132,512
642,827
829
2,774,510
13%
9%
0
2,035,241
0
2,035,241
5,158,761
0
1,442,975
104,006
1,546,981
4,017,119
41%
13%
31%
28%
Sources: Bureau of Customs (BOC), Department of Trade and Industry (DTI) and Industry Sources
1
Covers hot rolled products only in order to avoid double counting
2 Excludes
bar products converted from wire rods
Breakdown of Finished Steel Production
in MT (2011 vs. 2010)
In Metric Tons
Yr-Yr
2011
2010
2,620,000
2,347,108
12%
2,100,000
1,931,438
9%
Shapes and Sections1
320,000
201,074
60%
Wires
200,000
214,596
(7%)
482,140
409,908*
18%
Hot Rolled Coils
-
-
Cold Rolled Coils
0
5,552
392,140
354,000*
11%
90,000
50,356
79%
LONG PRODUCTS
Bars1
FLAT PRODUCTS
GI/Pre-painted/Zn-Al Coated Sheets
Pipes and Tubes
Source: Industry Sources
1 Includes
bar products converted from wire rods
* 2010 figures revised using new industry data
Change
Breakdown of Finished Steel Imports
in MT (2011 vs. 2010)
In Metric Tons
2011
2010
Yr-Yr
Change
Long Products
748,976
643,545
16%
Wire Rods
344,378
336,854
2%
Bars
115,425
65,207
77%
Shapes and Sections
179,509
190,130
(5%)
Sheet Piles
20,815
29,946
(30%)
Wires
39,997
18,516
116%
Rails
3,394
2,174
56%
45,458
718
1,963,439
1,437,638*
27%
Plates
441,527
280,728
57%
Hot Rolled Coils/Sheets
325,326
214,908
51%
Cold Rolled Coils/Sheets
383,017
292,648
31%
GI Sheets/ Pre-painted/Zn-Al
300,550
227,577
32%
Tinplates/TFS*
202,720
233,449*
(13%)
Pipes and Tubes
180,738
122,727
47%
Others (Alloy & Stainless Steels)
129,561
65,601
97%
Others (Alloy & Stainless Steels)
Flat Products
Sources: Bureau of Customs (BOC), Department of Trade and Industry (DTI) and Industry Sources
* 2010 figures updated from BOC and Industry sources
6,231%
Breakdown of Finished Steel Exports
in MT (2011 vs. 2010)
In Metric Tons
2011
2010
Yr-Yr
Change
Bars / Sections
-
465
Wires
-
364
Hot Rolled Coils/Sheets
-
21,795
Cold Rolled Coils/Sheets
-
24,695
GI Sheets/ Pre-painted/Zn-Al
-
40,839
Pipes and Tubes
-
16,678
TOTAL
Source: National Statistics Office and Industry Sources
104,836
Philippine Economic Outlook for 2012
 Government forecast is for GDP to grow to 5-6% in 2012
 However, there are downside risks arising from:
1. High power costs and supply constraints
2. Higher inflation due to increasing food and fuel prices
3. Volatility of international capital flows
4. High levels of government deficit / debt burden
 The challenge to the Philippines –
1. Revenues: Increase tax effort, mainly from compliance boost
2. Infrastructure: Massive catch-up program needed
3. Investments: Now exceeded by savings; confidence boost needed
Steel Outlook for 2012
Steel demand to benefit from –
 A generally optimistic macroeconomic outlook
 International credit ratings upgrades
 A vibrant real estate sector that is supported by sustained OFW
remittances and an improved confidence in the property industry
 Increased government-private sector program on infrastructure
development
 More than 3 million units backlog from housing development
 New hotel and other tourism developments
The steel supply situation in 2012 –
 More production of billets
 Expected increase in imports of finished steel products due to zeroing
of tariffs under FTAs with China and Korea
Steel Projects
COMPANY
SteelAsia
LOCATION
Bulacan,
Luzon,
DESCRIPTION
1,200K MT Twin Mini-Mill
600K MT ReBar Line
600K MT Section Line
With Finished Product
Rebar 10mm – 36mm
Wide Flange Beams W4 – W16
Flat Bars (shipbuilding application)
Flat Bars (automotive application)
Flat Bars (industrial grating)
Angles
Channels
Pagasa Steel
Pinagbuhatan
Pasig City,
NCR
400K MT Rolling Mill for ReBar
STATUS
Project Start
4th Quarter 2012
Commissioning
2015
ENVIRONMENTAL UPDATES:
• A proposed DENR Administrative Order (DAO)
establishing the National Ambient Air Quality
Guideline Values for PM2.5.
• Creation of Executive Order No. 11 - An Executive
Order creating the Climate Change and Greenhouse
Gas Management Council in the City of Pasig.
• Proposed DAO revising DAO 2004-36 (Procedural
Manual on Hazardous Waste Management)
Thank You
for
your attention!