Cambodia imported iron and steel worth $281.06 million last year, down 41.11 per cent from 2019’s $477.26 million and exported $6.20 million, rocketing 351 per cent from $1.37 million, according to the Ministry of Commerce.
While no information on the weight of the metals was made available, the General Department of Customs and Excise of Cambodia reported that 2019 imports clocked in at 722,621 tonnes.
Vei Samnang, provincial governor of Kampong Speu, which boasts five steel mills, told The Post on January 26 that a slowdown in construction activity during the Covid-19 outbreak contributed to the sharp drop in steel imports.
But the main factor behind the plunge was a rise in domestic production, which he said plays an increasingly important role in a market that was traditionally completely dependent on imports.
“It is a matter of fact – an increase in domestic production leads to the inevitable decline in the volume of imports and emerging gradual positive signs for exports,” Samnang said.
He added that with the current momentum in domestic production and Covid-19 improvements, the demand for steel will recover this year, whereas import volumes will not rebound as quickly.
Improvements in economic growth, politics and the market will increase investment in steel mills in Cambodia, he asserted.
Late in November, Chinese-owned Hong De Sheng (Cambodia) Steel Co Ltd announced that its $16.7 million steel mill in Kampong Speu’s northeastern Oudong district would start operations in December.
At a meeting on November 27, Group chairman Lin Xiangrong told Keo Rottanak, the managing director of state-owned energy utility Electricite du Cambodge (EdC), that the factory will be capable of churning out 500,000 tonnes of different kinds of steel products per annum in its first phase.
Cambodia Chamber of Commerce vice-president Lim Heng said demand for steel had fallen as project owners – especially international investors – were forced to temporarily suspend operations due to Covid-19.
He voiced optimism that demand would pick up once Covid-19 was brought under control and suspended projects resumed. “The drop in import value is due to the numerous construction site suspensions during the Covid-19 spread. In 2021, I think imports will grow again.”
Most of the steel that Cambodia uses today is imported from Vietnam, China, Thailand and South Korea, according to Heng.
While unable to provide detailed information concerning the uptick in revenue from steel exports, he said he learned that most is scrap.