MANILA, Nov 4 (Reuters) - Surging investments by Chinese steelmakers in Southeast Asia could add more than 50 million tonnes a year to the region's crude steel capacity, an industry leader said on Monday.
Planned Chinese investments in mega steel projects in Southeast Asia surged over the last two to three years, particularly in Indonesia, Malaysia and the Philippines, said Tan Ah Yong, the outgoing secretary general of South East Asia Iron and Steel Institute (SEAISI).
"Chinese steel investments have been present in ASEAN for some time now, but up until recently they were confined mainly to the smaller players and the projects were relatively modest in scale," Tan said in a farewell message to SEAISI members.
"Going forward, it is going to be an exciting and challenging time for the iron and steel industry in ASEAN," he said in the group's monthly publication released on Monday.
Tan, the group's secretary general since 2007, is stepping down this month, although no specific date has been given.
Some of the China-funded mega steel projects, with capacities of 3 million to 10 million tonnes a year, include proposed investments in the Philippines by HBIS Group, China's second-biggest steelmaker.
In December last year, HBIS signed a memorandum of understanding with the Philippines' Steel Asia Manufacturing Corp and state-owned Phividec Industrial Authority on a $4.4 billion project in the southern province of Misamis Oriental.
It will be the Philippines' first integrated steel complex, with an output capacity of up to 8 million tonnes per year. Construction and ramp-up for this project could be completed in three to five years, but the final investment decision has yet to be taken.
In September, HBIS also signed a memorandum of understanding with SteelAsia on a $1 billion integrated iron and steel project in Batangas province on the main Philippine island of Luzon.
Chinese company Panhua Group also plans to build an integrated steel plant in Misamis Oriental province, according to local media reports.
Steel demand in Southeast Asia is expected to grow 5.6% next year, faster than growth this year forecast at 3.1%, supported by infrastructure projects, according to the World Steel Association.
In contrast, steel demand growth in China is seen slowing to 1% next year, down from projected growth of 7.8% this year.
Tan said, however, that the ongoing U.S.-China trade war, uncertainties surrounding Brexit and the expected slowdown of global economic growth could limit steel consumption growth in Southeast Asia. (Reporting by Enrico dela Cruz; Editing by Tom Hogue)