Cambodia spent $192.280 million on imports of “iron and steel” in the first half (H1) of 2023, rising by 3.51 per cent from $185.764 million in 2022H1 as well as by 10.47 per cent from $174.1 million in 2022H2, despite a nine per cent on-year drop last month, according to provisional Customs (GDCE) data compiled in “International Merchandise Trade Statistics” bulletins.
This category of items, corresponding to Chapter 72 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 1.572 per cent of the $12.229 billion value of the Kingdom’s total goods imports during 2023H1. The corresponding figures for 2022 were: H1 (1.171%; $15.865B) and H2 (1.236%; $14.077B).
This was the highest semi-annual ratio since 2020H2’s 1.744 per cent (of $9.851B). The highest and lowest percentages in 2015-2023 – the period covered by the bulletins – were 2019H1’s 2.486 per cent (of $9.811B) and 2021H2’s 0.947 per cent (of $14.527B), respectively.
The GDCE did not provide any tonnage figures. To be clear, “articles of iron or steel” are not included in these imports as they are covered instead by Chapter 73 of the tariff schedule.
Global Real Estate Association president Sam Soknoeun told The Post on July 13 that real pressure is being put on the real estate and construction sectors worldwide by the ongoing global economic crisis, particularly the Ukraine conflict and the geopolitical turmoil among major powers.
The uncertainty in global economic prospects has prompted investors to delay the deployment of new funds, he said, suggesting that this is true across almost all sectors.
“In Cambodia, there’s less construction work being done on large projects and fewer real estate transactions occurring compared to before 2020, more time is needed for the sector to recover. Iron, steel and other building materials are not in great demand since there’s not as much construction going on,” he added.
According to Soknoeun, while the real estate market has improved from the 2020-2022 period, it is still notably weaker than it was before Covid-19.
GDCE figures show that, in June alone, the Kingdom imported $32.525 million worth of “iron and steel”, down 9.45 per cent year-on-year from $35.920 million, up 0.4 per cent half-on-half from $32.407 million, down 4.9 per cent quarter-on-quarter from $34.213 million, and up 5.9 per cent month-on-month from $30.712 million.
The June 2023 figure was down 35.5 per cent from the $50.422 million registered in May 2019, the highest monthly total on record for the 2015-2023 period. The next highest values for the aforementioned timeframe are $47.284 million (October 2019), $46.060 million (August 2019), $41.380 million (February 2019) and $40.634 million (November 2019).
In June 2023, Chapter 72 items made up 1.534 per cent of the Kingdom’s overall imports, which totalled $2.120 billion. For comparison, here are the corresponding figures for: May 2019 (2.526%; $1.996B), June 2022 (1.279%; $2.808B), December 2022 (1.477%; $2.195B), March 2023 (1.489%; $2.298B) and May 2023 (1.407%; $2.182B).
Housing Development Association of Cambodia secretary-general Huy Vanna remarked that the Cambodian construction sector has not performed so well since 2020, especially the sub-sector of large-scale foreign-owned projects.
The paucity of new developments in that market has translated into a perceptible drop in iron and steel demand compared to pre-2020 levels, he said, adding that the most recent construction projects have practically all been financed by domestic firms and geared towards locals.
“On the global scale, the construction industry will recover as the economy grows, given its close linkages to other sectors. Similarly, [Cambodian] imports of iron and steel will rise significantly as more large-scale construction projects get underway,” he said.
The bulk of the imported iron and steel used by construction players is sourced from Vietnam, China and Thailand, he shared.
According to the GDCE, “iron and steel” represented $359.819 million or 1.202 per cent of the Kingdom’s total $29.942 billion in imports for 2022, respectively marking 23.08 per cent and 4.32 per cent increases from $292.339 million and $28.703 billion in 2021.
Last year’s Chapter 72 imports also surged by 114.93 per cent against the $167.411 million registered in 2015 – equivalent to a compound annual growth rate (CAGR) of 11.55 per cent for the seven-year period.
The most recent data from Trading Economics similarly shows that, in 2021, Cambodia imported “iron and steel” worth a total of $292.34 million, with notable sources including mainland China ($134.04 million), Vietnam ($124.4 million), Laos ($10.14 million), Japan ($7.17 million) and Thailand ($6.41 million).