WSD’s Regional Outlook & Development: Advanced Asia
Developed Asia (JKT) – Gradual slide into the “Abyss”
In many ways, the situation in Developed Asia (Japan, S. Korea and Taiwan) mirrors that of the EU – declining population demographics combined with reduced export competitiveness are gradually eating away at decades of prior stability:
- Steel demand had been remarkably stable since the turn of the century with demand of 134 million tonnes in 2000, 136 million tonnes in 2010 and 135 million tonnes in 2019 reflecting correspondingly entrenched positions in both domestic and export steel markets.
- Since the onset of Covid, the situation has turned dramatically for the worse, with apparent demand declining from a post-Covid recovery peak of 136 million tonnes in 2021 to 115 million tonnes in 2024 (and an estimated 111 million tonnes in 2025 based on preliminary figures).
- Crude steel production has seen a similar pattern, declining from an average figure of 197 million tonnes from 2010-2019 and a post-Covid peak of 190 million in 2021 to as estimated 161 million tonnes in 2025.
The erosion in export competitiveness has been painfully acute for the region, with net exports declining from an average figure of 51 million tonnes from 2010-2019 (on a crude steel equivalent basis) to only 42 million tonnes in 2025 – a 17% decline that appears set to continue for the foreseeable future.
The lack of a visible policy shift among the region’s constituent governments is the key featuring differentiating Developed Asia from the EU. This is understandable considering:
- each country is a net steel exporter; hence, increasing import “protectionism” with respect to direct steel trade doesn’t offer an immediate solution to the crisis of eroding demand and export competitiveness;
- indirect steel trade – in the form of automobiles and other goods – faces a similar dilemma of reduced competitiveness in foreign (export-oriented) markets, especially in the face of Chinese competition; and
- particularly dire population demographic trends make it difficult to justify a substantial boost in deficit-financed investment to boost domestic consumption of steel and steel-containing products.
This list of problems, especially the latter, appears especially confounding to solve; as such, WSD remains bearish on the outlook for steel demand and production for the region:
- Apparent consumption is forecast to decline an additional 7 million tonnes (finished product basis) to 104.5 million tonnes by 2035, representing a 23% decline compared to pre-Covid levels. A further decline to about 99 million tonnes is forecast by 2040 assuming the same trends remain in effect.
- Net exports further deteriorate to about 37 million tonnes by 2035 and 33 million tonnes by 2040
- Hence, crude steel output erodes to about 152 million tonnes by 2035 and 142 million tonnes by 2040
The bulk of the decline in steel output is via the BF/BOF route, down 22 million tonnes by 2035 to 92 million tonnes from 114 million in 2025 with a roughly 12 million tonne increase in EAF output representing an offset.