Analysis of the Current Situation and Capacity of the Philippine Steel Industry

Production Scale and Regional Distribution

According to data from the Southeast Asia Iron and Steel Institute, the Philippines' crude steel capacity in 2020 was approximately 3 million tons, ranking fifth among the six ASEAN countries (Indonesia, Thailand, Malaysia, Vietnam, the Philippines, and Singapore), only higher than Singapore (800,000 tons) and significantly lower than Vietnam (23.2 million tons), Malaysia (16.1 million tons), Indonesia (15 million tons), and Thailand (13.8 million tons). This indicates that the Philippine steel industry is relatively underdeveloped within the Southeast Asian region but also suggests significant potential for growth.

Notably, the Philippines' steel production capacity is undergoing rapid expansion. It is projected that by 2026, the country's crude steel capacity will reach 15.2 million tons (including 13 million tons of BF-BOF steel capacity and 2.2 million tons of EAF steel capacity), representing a more than fivefold increase compared to 2020. This growth is primarily driven by several large-scale steel projects currently under construction or in the planning stages, including the Panhua Group's integrated steel project and the expansion project of SteelAsia Manufacturing Corp.

In terms of regional distribution, the Philippine steel industry is mainly concentrated in provinces such as Batangas, Quezon, and Sarangani. Batangas is a traditional industrial zone in the Philippines, hosting several steel enterprises, including SteelAsia Manufacturing Corp.'s Lemery steel plant currently under construction. Sarangani, leveraging its port advantages and local government support, has attracted Panhua Group's large-scale integrated steel project. This regional distribution is closely related to local infrastructure conditions, raw material accessibility, and market proximity.

Enterprise Landscape and Market Structure

The Philippine steel industry exhibits an oligopolistic competition pattern, with major players including SteelAsia Manufacturing Corp., Global Steel Philippines, and Panhua Group Philippines. SteelAsia Manufacturing Corp. is the largest long product producer in the Philippines and is actively advancing multiple expansion projects, including the Lemery steel plant in Batangas (with a designed capacity of 500,000 tons/year of sections), the section rolling production line at the Candelaria plant in Quezon Province, and the rebar production line (1 million tons/year) and wire rod production line (500,000 tons/year) at the Concepcion plant in Tarlac Province.

Foreign companies are playing an increasingly important role in the Philippine steel industry. The Panhua Group from China is investing $3.5 billion in an integrated steel project located in Maasim Town, Sarangani Province, in the southern Philippines. The project will establish a comprehensive manufacturing base encompassing steel production, port operations, an industrial park, and supporting power plants. Unveiled during the Duterte administration in 2018, the project faced delays due to regulatory obstacles, site development challenges, and the COVID-19 pandemic. However, it successfully produced its first coil of color-coated sheet on May 26, 2025.

Japanese companies are also actively participating in the Philippine steel market. For instance, Maruichi Philippine Steel Tubes, Inc. (MPST), a subsidiary of Maruichi Steel Tube Ltd., plans to expand its welded pipe capacity in the Philippines by adding a new production line for manufacturing welded pipes with a diameter of 50.8 mm, scheduled to commence operation in January 2026. The involvement of these foreign companies not only brings capital but also introduces advanced technology and management experience, contributing to the overall improvement of the Philippine steel industry.

Steel Types and Product Structure

The product structure of the Philippine steel industry is undergoing a transformation from simplicity to diversity. The main products can be categorized as follows:

• Long Products for Construction: Mainly including rebars and wire rods, these are currently the dominant products of the Philippine steel industry, primarily meeting domestic construction needs. Local companies like SteelAsia Manufacturing Corp. dominate this segment.

• High-End Flat Products: Represented by color-coated sheets, these are mainly produced by foreign companies. Panhua Group's integrated steel plant in the Philippines has already commissioned a color-coated sheet production line with an annual capacity of 200,000 tons, filling the gap in such products in the country.

• Heavy Sections: Including high-value-added products such as H-beams, I-beams, angles, channels, and sheet piles. SteelAsia Manufacturing Corp. is constructing a heavy section mill in Candelaria, Quezon Province, with a designed annual capacity of over 1 million tons, aiming to replace imports. Currently, such products are mainly sourced from countries like China and Vietnam.

Market Demand and Consumption Structure

Steel consumption in the Philippines is closely linked to infrastructure construction and building development. With the Philippine government promoting the "Build, Build, Build" infrastructure modernization program and the acceleration of urbanization, the demand for steel continues to grow. The surge in urbanization and infrastructure spending across Southeast Asia has also driven increasing demand for construction-grade steel, providing broad market opportunities for the Philippine steel industry.

It is worth noting that there are significant differences in the consumption structure of different types of steel products in the Philippines. Long products (such as rebars and wire rods) primarily meet domestic construction needs, while flat products are mainly used in manufacturing and automotive industries. Due to the relatively weak manufacturing base in the Philippines, the consumption of flat products is relatively small. However, with industrial development and upgrading, demand for flat products is expected to grow in the future.

The geographical distribution of steel demand in the Philippines is also uneven. The Metro Manila area and other major cities are the primary regions for steel consumption, closely related to their urbanization levels and infrastructure development intensity. However, with the implementation of regional balanced development strategies, steel demand in areas such as Mindanao is also expected to grow. Local officials in Sarangani have stated that the Panhua Group project will bring structural transformation to Mindanao, driving the development of supply chains, logistics, and engineering services.