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Steel Imports Report: PhilippinesJune 2019BackgroundThe Philippines is the world’s 17th-largest steel importer. In 2018, thePhilippines imported 9.1 million metric tons of steel, an 11 percentincrease from 8.1 million metric tons in 2017. The volume of thePhilippines steel imports in 2018 was less than a third of that of theworld’s largest importer, the United States in 2018. In value terms,steel represented just 5.2 percent of the total goods imported into thePhilippines in 2018.The Philippines imported steel from more than 50 countries andterritories in 2018. The 10 countries highlighted in the map belowrepresent the top sources for the Philippines imports of steel, with thePhilippines receiving more than 100 thousand metric tons from eachand together accounting for 95 percent of Philippines steel imports in2018.Quick Facts: Imported 9.1 millionmetric tons of steel millproducts (2018) 594% steel import growthsince 2009 Year-on-year importvolume up 11% whileimport value up 41% Import penetration downfrom 88.2% in 2016 to85.6% in 2017 Top three importsources: China, Russia,Japan Largest producers:Steelasia Manufacturing,Stronghold Steel,Treasure Steelworks No trade remedies ineffect against imports ofsteel mill products1

Steel Imports Report: PhilippinesSteel Trade BalanceBetween 2005 and 2015, the Philippinesmaintained an average annual steeltrade deficit of -1.9 million metric tons.The dramatic rise in imports in 2016caused the trade deficit to grow by 152percent from -3.2 million metric tons in2015 to -8.0 million metric tons in 2016.In 2018, the trade deficit grew by 11percent to reach -9.0 million metrictons.Since 2009 to 2018, the Philippinessteel imports have grown 594 percent,while exports have decreased 74percent.3.0Philippines Trade in Steel Mill Products, Quarterly,Millions of Metric Tons2.5ExportsImports2.01.51.00.50.02005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Source: U.S. Department of Commerce - IHS Ma rkit Global Trade Atl asImport Volume, Value, and ProductPrior to 2015, the Philippines’ volume of steel imports displayed moderate annual growth. Importstotaled 1.3 million metric tons in 2009 and by 2014 had increased 79 percent to 2.3 million metrictons. In 2015, imports increased 37 percent from 2014 to 3.2 million metrics tons before surging to8.1 million metric tons in 2016 — a 152 increase from 2015. In 2018, imports increased by 11 percent,to 9.1 million metric tons. The value of the Philippines’ 2018 steel imports increased by 41 percent,from 4.0 billion in 2017 to 5.6 billion in 2018.Semi-finished products accounted for 37 percent of the Philippines’ steel imports in 2018— a total of3.4 million metric tons. Flat products accounted for 33 percent of the Philippines’ imports (3.0million metric tons), followed by long products at 24 percent (2.2 million metric tons), pipe and tubeat 5 percent (414 thousand metric tons), and stainless at 1 percent (62 thousand metric tons).4.0Philippines Imports of Steel Mill ProductsMillions of Metric TonsPhilippines Imports of Steel Mill ProductsBillions of U.S. Dollars2.5flat3.5flatlong3.0pipe and tube2.5semilong2.0pipe and 8Source: IHS Ma rkit Global Trade Atl as2016201820162018Source: IHS Ma rkit Global Trade Atl as22016201820162018

Steel Imports Report: PhilippinesImports by Top SourceThe top 10 source countries for thePhilippines steel imports represented95 percent of the total steel importvolume in 2018 at 8.6 million metricstons (mmt). China accounted fornearly half of the Philippines’ importsat 47 percent (4.3 mmt), followed byRussia at 19 percent (1.7 mmt), Japanat 8 percent (726 thousand metrictons), Vietnam at 4 percent (387thousand metric tons), Taiwan at 4percent (383 thousand metric tons),South Korea at 4 percent (366thousand metric tons). Thailand at 3percent (243 thousand metric tons),India at 3 percent (232 thousandmetric tons), Saudi Arabia at 2percent (217 thousand metric tons),and Turkey at 1 percent (114 thousandmetric tons).Philippines Steel Imports-Top 10 Sources,2018 - Percent of VolumeSource: U.S. Department of Commerce - IHS Markit Global Trade AtlasTrends in Imports from Top SourcesFrom 2017 to 2018, the volume of the Philippines’ imports increased from 6 of the Philippines’ top10 import sources. Imports from Turkey (2,892%), showed the largest volume increase in 2018,followed by Russia (120%), South Korea (49%), Taiwan (27%), China (4%), and Japan (3%). Thevolume of the Philippines’ importsPercent Change in Imports from Top 10 Sources (2017-2018)only decreased from Thailand (-73%),Vietnam (-25%) and India (-3%). DataChinaVolume120 %regarding Saudi Arabia was notRussia166 %available.ValueJapanThe overall value of the Philippines’Vietnamimports increased from 8 of the top 10Taiwansources. The value of imports from South KoreaTurkey increased the most in 2018-73 %Thailand(2,813%), followed by Russia (166%),IndiaThailand (55%), South Korea (53%),Saudi ArabiaTaiwan (29%), China (28%), Japan2892 %Turkey(16%), and India (8%). Only imports2813 %-60% -45% -30% -15%0%15%from Vietnam (-9%) decreased adeAtlasvalue in 2018.30%45%60%Outside the top 10 sources, other notable volume changes included Philippines’ imports from 12thranked Egypt (147%), 13th-ranked Kazakhstan (381%), 14th-ranked Malaysia (77%), 16th-rankedUnited Arab Emirates (1,818%) and 18th-ranked United Kingdom (16,375%).3

Steel Imports Report: PhilippinesTop Sources by Steel Product CategoryThe top source countries for the Philippines’ imports by volume vary across types of steel products,although China was the largest source for 4 of the 5 product types. The Philippines imported thelargest share of flat products from China in 2018 at 69 percent (2.1 million metric tons), followed byJapan at 16 percent (483 thousand metric tons), and Taiwan at 9 percent (258 thousand metrictons). China was also the largest source for long product imports at 78 percent (1.7 million metrictons), while South Korea sent the second largest share of long products at 7 percent (153 thousandmetric tons).In 2018, nearly all of the Philippines’ imports of pipe and tube came from China. In total, 93percent of all pipe and tube imports were from China (385 million metric tons).Russia was the largest source of the Philippines’ imports of semi-finished steel in 2018, at 49percent (1.7 million metric tons). Vietnam was the second largest source of semi-finished importsat 9 percent (313 thousand metric tons).China was the largest source of imported stainless products at 44 percent (27 thousand metrictons), followed by Taiwan at 19 percent (12 thousand metric tons), and Japan at 14 percent (8thousand metric tons).Philippines Top 5 Import Sources by Product - 2018ChinatscJapanudTaiwanroPt South KorealaFVietnamChinastc South JapanMalaysiaTaiwanSouth KoreaRussiadeVietnamhsiinf- Saudi Malaysia00.511.52Mi l lions of Metric TonsSource: U.S. Department of Commerce - IHS Ma rkit Global Trade Atl as42.5

Steel Imports Report: PhilippinesPhilippines’ Export Market Share from Top Source CountriesIn 2018, the share of steel exports sent to the Philippines increased from eight of its top ten importsources, where data was available. The share of China’s steel exports to the Philippines showed thelargest increase (up 1.2 percentagePhilippines' Steel Export Market Sharepoints), followed by Russia andShare of Philippines'Share ofPhilippines' Change inThailand, both up 1.0 percentage Top 10 ImportSourcesExportstoRankinExportstoRank inSharepoints. Export shares in TaiwanPhilippines 2017Philippines 2018andTurkeyalsoincreased20172018substantially, up 0.9% and 0.7%China5.6%36.8%3respectively, while export shares in Russia0.3%391.3%19India, South Korea and Japan Japan2.1%112.2%11increased by less than half a VietnamN/AN/AN/AN/AN/Apercentage point each.Taiwan2.6%113.5%111.1%181.2%16Among the Philippines’ top import South KoreaThailand10.9%212.0%2sources, Thailand and China sentIndia1.9%132.1%12the largest shares of their total steelSaudi ArabiaN/AN/AN/AN/AN/Aexports to the Philippines at 12.0Turkey0.0%1590.7%32and 6.8 percent, respectively. In Source: IHS Ma rki t Gl oba l Tra de Atl a s , ba s ed on i mport da ta per reporti ng country2018, flat products accounted for * Export Da ta for Vi etna m & Sa udi Ara bi a i s una va i l a bl e48 percent (2.2 million metrictons) of China’s exports to the Philippines, while long products accounted for 41 percent (1.9 millionmetric tons), and pipe and tube products accounted for 9 percent (424 thousand metric tons). Semifinished products accounted for 59 percent of Thailand’s exports to the Philippines (131 thousandmetric tons), while long products accounted for 39 percent (87 thousand metric tons).Steel Import Composition of Top Market-Share Countries - 2018FlatLongChinaPipe & dPipe & TubeLongStainless0.01.02.0Source: IHS Ma rkit Global Trade Atlas, based on i mport data per reporting country53.0Mi l lions of Metric Tons

Steel Imports Report: PhilippinesOverall Production and Import PenetrationPhilippines' Import Penetration, Millions of Metric Tons1098ProductionApparentConsumption mmt100%ImportsImport Penetration,percent, right uctionApparent ConsumptionImportsImport .4%76.4%88.2%85.6%N/ASource: U.S. Depa rtment of Commerce, Worl d Steel As s oca ti on, IHS Ma rki t Gl oba l Tra de Atl a s - 2018The Philippines’ crude steel production increased by 75 percent between 2009 and 2017. Productionin 2017 (the latest year for which data is available), increased 27 percent to 1.4 million metric tonsfrom 1.1 million metric tons in 2016. Apparent consumption (a measure of steel demand) hasincreasingly outpaced production since 2009. The gap between demand and production remainedrelatively stable between 2009 and 2013 but widened rapidly since 2014 to reach -8.1 million metrictons in 2017. Since 2009, import penetration has remained consistently above 50 percent. Afterdecreasing by 5 percentage points between 2009 and 2012, import penetration jumped 11.5percentage points to 88.2 percent in 2016, before declining slightly to 85.6 percent in 2017.Top ProducersThe Philippines has three steel-makingcompanies, the majority of which useelectric arc furnace technology toproduce steel. Two of the producers —StrongholdSteelandTreasureSteelworks — are subsidiaries of theholdingcompany,TKCMetalsCorporation. The Philippines also has anumber of rolling mills that producelong products, flat products, wireproducts, pipe and tube, and galvanizedproducts.Philippines' Top Steel Producers in 2017CompanyTreasure Steelworks Corp.(subsidiary of TKC)Steelasia ManufacturingCorp.CapacityMain Products(mmt)0.3Billets2.1Reinforcing barsSource: Metal Bulletin, Iron and Steelworks of the WorldDirectory 2017; Philippine Iron and Steel Institute;Company websites6