Singapore's steel use, foreign trade hit by COVID-19

Singapore's apparent steel consumption plunged by 31% on year in 2020 as major steel using sectors including construction and transport engineering were hit hard by the COVID-19 pandemic, according to Eugene Ng, head of Strategy and Business Development of NatSteel Holdings. Steel foreign trade in this important trading hub also slowed significantly as the virus raged globally.

NatSteel is the island-state's only steel producer. Addressing at the SEAISI 50th Anniversary e-Conference & Exhibition on June 17, Ng said that apparent steel consumption fell to only 1.6 million tonnes last year from 2.3 million tonnes in 2019.

Last year, Singapore's construction sector declined to S$20 billion ($14.9 billion), as construction companies grappled with the lack of manpower during the outbreak of clusters among migrant workers in dormitories, especially over April-July 2020.

Meanwhile, the country's transport engineering sector experienced an on-year contraction of 28% in 2020, compared with growth of 6.4% in 2019, as work in shipyards was disrupted by requirements to implement safe management measures, according to the speakers. Orders among the builders and fabrication companies were also weak.

Nevertheless, Ng was optimistic about the future, saying that most major public works projects were just postponed, but not cancelled, and that by June, construction activity had recovered to around 80% of pre-pandemic levels, with safe management measures still in place.

"Steel consumption is expected to bounce back this year, as most construction activities have resumed," he said, though "the transport engineering sector will be affected by weakness in the global oil and gas markets," he added.

As for Singapore's total steel foreign trade, the total volume also decreased 16% on year in 2020, mainly because of lower imports in the second half, as a result of many economies around the world being locked down, Ng noted.

In 2020, Singapore's steel imports declined to 2.7 million tonnes, down from 3.4 million tonnes in 2019, whereas exports remained largely stable at 1.5 million tonnes, compared with 1.6 million tonnes in 2019, Ng said quoting Customs statistics.

China remained Singapore's largest supplier of steel last year (accounting for 24% of Singapore's total imports), followed by South Korea (17%), which replaced Turkey at No.2. South Korea had shipped a lot of hot-rolled sheets and strips to Singapore last year.

Also in 2020, 52% of Singapore's steel exports were destined for Indonesia, with the second largest destination being Malaysia, Ng's presentation showed.

Written by Olivia Zhang, zhangwd@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.