Despite the challenges faced by China on the domestic front, the country is still looking at making investments in ASEAN countries in 2023.

For 2022, steel demand in ASEAN is expected to reach 77.9 million mt, up about 3.5% from 2021, data from the Southeast Asia Iron and Steel Institute showed.

Amid the projected increase in demand, future supply is expected to exceed demand if new steel projects come online in Indonesia, Malaysia and Vietnam, estimated at 90.8 million mt in the coming years, reaching about 162.6 million mt in 2030, SEAISI's projections showed.

SEAISI said a majority of the new steel plants in ASEAN are China-backed to sell the steel back to China.

Fresh China-backed steel projects emerged toward the end of 2022, the latest being Esteel Enterprise, which plans to build an MR19.65 billion ($4.46 billion) "green" steel plant at Sipitang, Sabah, Malaysia, by 2025.

Phase one is expected to begin over the third quarter of 2023 and will involve the building of a 2.5 million mt/year hot-briquetted iron plant. For phases two and three, two direct reduced iron plants of 2.5 million mt/year output each will be built.