> **来源：[研报客](https://pc.yanbaoke.cn)** # Economic Growth and Steel Demand Forecast for Southeast Asia and India # 东南亚和印度经济增长和钢材需求预测 姜婧 Jiang Jing 从业资格号 Qualification No.: F3018552 投资咨询号 Consulting No.: Z0013315 王含章 Wang Hanzhang 从业资格号 Qualification No.: F03121254 投资咨询号 Consulting No.: Z0022985 徐轲 Xu Ke 从业资格号 Qualification No.: F03123846 投资咨询号 Consulting No.: Z0019914 桂晨曦 Gui Chenxi 从业资格号 Qualification No: F3023159 投资咨询号 Consulting No: Z0013632 CITIC Futures International Service Platform: https://internationalservice.citicsf.com # 摘要 Abstract The ASEAN-5 and India are in a stage of rapid development, and the demand structure for steel is highly concentrated in the construction and infrastructure sectors. By 2030, the apparent consumption of steel in the ASEAN-5 and India is expected to continue to grow, and the main line of regional steel demand growth will still revolve around infrastructure and urban construction. Among them, India has a higher demand elasticity and greater potential for increment. Risks: Geopolitical risks; Economic growth in ASEAN and India falling short of expectations; Excess supply of iron ore and scrap steel; Global economic recession. 东盟五国与印度正处于高速发展的阶段，且钢材需求结构高度集中于建筑与基础设施领域。至2030年东盟五国与印度钢材表观消费量有望继续增长，区域钢材需求增长主线仍将围绕基建与城市建设展开，其中印度的需求弹性较高，具备更大的增量潜力。 风险因素：1）地缘风险；2）东盟与印度经济增速不及预期；3）铁矿石与废钢供应超预期；4）全球经济衰退。 # Content 目录 1. Overview 3 2. The basic situation of the ASEAN-5 and India 3 3. The core driver of steel demand 13 4. Steel Demand Forecasting in Southeast Asia and India - A Three-Model Approach 15 # Appendix: Chinese Version 25 1. 概述 ..... 25 2. 东盟五国与印度基本情况 ..... 26 3. 钢铁需求的核心驱动 32 4.东南亚和印度钢材需求预测——三模型方法 35 # CITIC Futures International Research Reports 42 # 1. Overview Currently, the ASEAN-5 and India are in a stage of rapid development. Steel consumption within the region is highly concentrated in the construction and infrastructure sectors, so the fluctuations in steel demand are more dependent on the pace of infrastructure investment and the intensity of urban construction. Based on relevant literature and our data analysis, we find that per capita GDP and urbanization rate can effectively describe the development stage of an economy. Through cross-sectional and trend analysis, we study the explanatory power of these two variables for changes in steel demand. At the same time, we find that steel usage intensity can also describe the development stage of each economy and has significant guiding significance for incremental projection. Furthermore, the ASEAN-5 and India each have their own characteristics in terms of steel demand: steel demand growth in Malaysia and Thailand is tending to stabilize, Vietnam is still in a stage of high demand elasticity, while Indonesia and the Philippines exhibit a typical infrastructure-led demand structure. Despite a relatively low proportion of manufacturing, India's steel demand growth potential is prominent, supported by its large population and continuous public investment. This article uses a combination of three models for a medium-term outlook to estimate the steel demand of the six countries in 2030. The combined apparent steel consumption of the ASEAN-5 and India may reach approximately 270 million tons, with a CAGR of about $5.8\%$ , bringing about an additional demand for approximately 116 million tons of iron ore. India is the main source of this increment. In addition, we predict that in a pessimistic scenario, China's steel demand will decline by about 10 million tons in 2026, while the ASEAN-5 and India will drive an annual demand increment of about 14 million tons. Therefore, the demand increment from emerging markets can effectively offset the reduction in domestic demand in China, promoting the bottoming out and stabilization of ferrous metal prices. # 2. The basic situation of the ASEAN-5 and India The ASEAN-5 and India have experienced rapid growth in recent years. With investment from their respective governments and domestic and foreign capital, many infrastructure and manufacturing projects have been launched or implemented, driving a significant increase in the demand for steel. Therefore, this article aims to take a medium-term perspective and provide an outlook on the development of the ASEAN-5 and India, as well as roughly estimate the medium-term steel demand of these six countries. # 2.1 Vietnam From the perspective of urbanization rate and per capita GDP, Vietnam is currently in a stage where urbanization is accelerating and industrialization is deepening simultaneously. According to data from Wind and iFinD, Vietnam's urbanization rate has been increasing linearly since the 1990s, and has significantly risen since the 2000s, maintaining a relatively high level for a long time. GDP has also generally increased. As of 2024, Vietnam's per capita GDP is approximately $4,717, and the urbanization rate is $40.2\%$ , with the manufacturing value-added accounting for about $23.4\%$ of the GDP. In terms of the downstream distribution of steel consumption, Vietnam's steel consumption is highly concentrated in the fields related to construction and engineering. According to data from the Vietnam Steel Association (VSA) and the World Steel Association (WSA), Vietnam's apparent steel consumption in 2023 was approximately 21.17 million tons. Construction accounted for about $89\%$ of steel consumption, while manufacturing sectors such as home appliances, electrical equipment, machinery, automobiles, and energy accounted for less than $10\%$ combined, indicating that the direct driving force for Vietnam's steel demand mainly comes from urban construction, infrastructure, and engineering projects. Thus, Vietnam's steel demand exhibits the characteristic of "industrialization establishing the macro foundation, and construction and engineering dominating the physical consumption", with strong medium-term elasticity and sustainability. In national-level industrial and infrastructure planning, Vietnam coordinates the advancement of industrial upgrading and investment expansion by prioritizing manufacturing development and strategic top-level design for transportation infrastructure. According to official disclosures from the Vietnamese government, documents such as Directive No. 23 issued by the Politburo in 2018 have positioned manufacturing as a long-term growth core extending toward 2030 and 2045. On the infrastructure front, efforts are focused on developing trunk railways, expressways, and key hub projects, reinforcing an integrated layout that connects "transport corridors—ports—industrial clusters." Major initiatives such as the North—South high-speed railway, the Lao Cai—Hanoi—Haiphong railway, and the expansion of industrial parks in northern and southern regions lay the infrastructural groundwork for advancing Vietnam's manufacturing sector. Chart 1: Vietnam's Economic Development Sources: Wind, iFinD, CITIC Futures Chart 2: The proportion of end-use for steel in Vietnam Sources: VSA, CITIC Futures # 2.2 Malaysia Malaysia is the most developed among the ASEAN-5. According to data from Wind and iFinD, the urbanization rate has been increasing nearly linearly since the mid-20th century, and the per capita GDP has also been rising overall during the same period. The industrialization level has also improved accordingly, and it reached a peak around 2000, and then declined slightly as the economic structure shifted towards the service sector. As of 2024, the per capita GDP of Malaysia is approximately 11,867 US dollars, and the urbanization rate is $80.12\%$ . The proportion of manufacturing in GDP remains at $24.1\%$ . Looking further at the downstream structure of the steel industry in Malaysia, steel consumption is mainly driven by construction and engineering needs. Data from WSA and SERC show that in 2023, Malaysia's apparent steel consumption was approximately 6.7 million tons, with construction accounting for about $63.2\%$ , which was the absolute core of steel demand; metal products, household appliances and electrical equipment, mechanical equipment and automobiles, and other manufacturing-related uses accounted for about $30\%$ , and the remaining uses accounted for a relatively low proportion. This structure indicates that the direct driving force for Malaysia's steel demand mainly comes from urban construction, infrastructure and engineering construction activities. At the industrial and infrastructure policy level, the data released by the Malaysian government shows that Malaysia uses "Ekonomi MADANI (2023)" as a long-term reform and investment coordination framework, and promotes the acceleration of infrastructure such as transportation logistics, digitalization of public services and energy through annual fiscal budgets. In terms of manufacturing policies, the "New Industrial Master Plan 2030 (NIMP 2030)" clearly focuses on advanced manufacturing, electronic and electrical equipment, equipment manufacturing and green industries, and manufacturing is positioned as a core sector supporting export competitiveness, medium- and long-term physical investment and raw material demand. Chart 3: Malaysia's Economic Development Chart 4: The proportion of end-use for steel in Malaysia Sources: Wind, iFinD, CITIC Futures - Construction Engineering - Metal Products - Household Appliances - Machinery Equipment Automobiles Others 7.8% 0.7% 7.8% 9.1% 63.2% 11.4% Sources: SERC, CITIC Futures # 2.3 Thailand Among the ASEAN-5, Thailand's development level is second only to Malaysia and it is in the later stage of the middle-income phase. According to data from Wind and iFinD, since 2000, the urbanization process has accelerated significantly, and the growth rate of per capita GDP has shifted from high-speed to steady growth. With the upgrading of the economic structure, the proportion of manufacturing added value in GDP has declined from a peak level, but the urbanization and export-oriented development model still continuously support the demand for buildings and infrastructure through transportation, logistics, industrial parks, and public facilities construction. As of 2024, Thailand's per capita GDP is approximately $7,345, and the urbanization rate is $54.32\%$ . The proportion of manufacturing added value in GDP is approximately $24.3\%$ . In terms of the downstream distribution of steel consumption, steel consumption in Thailand is mainly for buildings and infrastructure, and there is also a significant proportion for industrial uses. According to the data disclosed by WSA and ISIT, in 2023, Thailand's apparent steel consumption was approximately 16.08 million tons, of which the construction sector accounted for about $56.5\%$ , and infrastructure-related uses accounted for approximately $21.8\%$ , totaling nearly $80\%$ and dominating the market; the remaining steel demand was distributed in machinery equipment, manufacturing support, and other fields, indicating that the direct pull of steel demand mainly comes from urban construction, transportation logistics, and public engineering, etc. At the industrial policy level, according to official Thai government documents, Thailand has the "20-Year National Strategy 2018 - 2037" as its long-term framework, and the upgrading of transportation and logistics infrastructure is established as the core handle to enhance national competitiveness and regional hub status. "Thailand 4.0" and the 13th National Economic and Social Development Plan (2023 - 2027) clearly define the transformation of manufacturing towards high value-added and technology-intensive directions; Spatially, the Eastern Economic Corridor (EEC) is concentratedly arranged with automotive/EV, electronic electrical, and equipment manufacturing, and simultaneously promotes railway, port, and airport projects. The China-Thailand Railway (Bangkok - Chalong direction) and the investment in EEC industrial parks jointly constitute the key foundation for supporting export-oriented growth and physical investment expansion. Chart 5: Thailand's Economic Development Sources: Wind, iFinD, CITIC Futures Chart 6: The proportion of end-use for steel in Thailand Sources: ISIT, CITIC Futures # 2.4 Indonesia Indonesia, as the largest economy within ASEAN, exhibits the characteristics of continuous urbanization and expansion of the economy, with fluctuations in the growth pace being periodic. According to data from Wind and iFinD, since the 2000s, Indonesia's per capita GDP and urbanization rate have steadily increased, but the proportion of manufacturing in GDP has declined. As of 2024, Indonesia's per capita GDP is approximately $4,925, and the urbanization rate is $59.2\%$ . The manufacturing value-added accounts for about $19\%$ of GDP. From the perspective of the end-user structure, Indonesia's steel consumption shows a significant engineering and infrastructure-oriented characteristic. In 2023, Indonesia's apparent steel consumption was approximately 176.5 million tons, with infrastructure construction accounting for $40\%$ and non-infrastructure buildings accounting for $38\%$ , totaling nearly $80\%$ , while the proportion of other uses is relatively low, indicating that steel demand is mainly driven by urban construction and public projects, rather than manufacturing expansion. Combined with the trend of the manufacturing value-added proportion in GDP gradually declining, Indonesia's steel demand is therefore more consistent Amenabar Bharat with the model dominated by infrastructure and engineering investment. In terms of national industries and infrastructure layout, Indonesia focuses on the construction of the new capital Nusantara (IKN) and the "Making Indonesia 4.0" initiative as core drivers, jointly promoting infrastructure investment and manufacturing transformation. IKN focuses on driving the construction of government areas, municipal transportation and public facilities, forming a continuous demand for infrastructure construction; "Making Indonesia 4.0" guides the manufacturing sector towards a technology-intensive transformation through industrial digitalization and upgrading of the industrial chain. The "National Medium-Term Development Plan (RPJMN 2020 - 2024)" establishes infrastructure as a key public investment for enhancing connectivity and industrial carrying capacity. Chart 7: Indonesia's Economic Development Chart 8: The proportion of end-use for steel in Indonesia Sources: Wind, iFinD, CITIC Futures Non-infrastructure construction Infrastructure projects Others Sources: YIEH CORP SEAISI, CITIC Futures # 2.5 Philippines In the ASEAN member economies, the Philippines exhibits a development characteristic of "slow progress in urbanization and relatively weakened manufacturing sector". According to data from Wind and iFinD, since the 1990s, the urbanization rate has generally remained between $16\%$ and $26\%$ , and the overall level and slope are significantly lower than those of other major economies in the region. At the same time, the proportion of manufacturing output in GDP has continuously declined since the early 2000s, while per capita GDP has steadily increased. As of 2024, the per capita GDP of the Philippines is approximately $3,985, and the urbanization rate is $48.6\%$ . The proportion of manufacturing output in GDP is approximately $15.7\%$ . At the demand-side structural level, steel consumption in the Philippines is highly concentrated in the construction and engineering sectors. In 2023, the apparent steel consumption in the Philippines was approximately 9.45 million tons, with the construction sector accounting for $81\%$ , while industrial uses such as manufacturing, shipbuilding, and packaging accounted for less than $20\%$ , indicating that steel demand is mainly driven by public infrastructure and urban construction. In terms of policy and public investment arrangements, the Philippines uses the "Philippine Development Plan (PDP) 2023 - 2028" as its medium-term framework. Through the "Build Better More" (BBM) and infrastructure flagship projects (IFPs), it systematically promotes transportation, municipal, and public service construction. Industrial policies focus on manufacturing revitalization, using the SIPP to guide capital investment in areas such as automobiles and EVs. However, overall, infrastructure investment remains the main line. Core projects of BBM/IFP such as the Manila Metro and ongoing expansion projects support cross-year construction, forming an infrastructure-first model, with industrial policy playing a supporting role. Steel demand, especially for long steel products used in construction, continues to be released as urban engineering and rail transit progress, constituting the most stable source of support for steel consumption in the Philippines. Chart 9: Philippines' Economic Development Sources: Wind, iFinD, CITIC Futures Chart 10: The proportion of end-use for steel in Philippines Sources: Board of Investments, CITIC Futures # 2.6 India India is currently in a stage of low urbanization level and relatively weak manufacturing sector. According to data from Wind and iFinD, although the urbanization rate has been continuously rising, the slope is relatively flat, creating long-term and gradual infrastructure demands for housing, transportation, municipal services and public utilities. At the same time, the proportion of manufacturing added value in GDP has remained at a low level and fluctuated significantly, its direct contribution to macro growth and steel demand is limited. Steel demand is unlikely to be driven primarily by manufacturing expansion. As of 2024, India's per capita GDP is approximately $2,697, with an urbanization rate of $36.9\%$ and the proportion of manufacturing added value in GDP being about $12.6\%$ . The annual reports of WSA and Tata Company show that in 2023, India's apparent steel consumption was approximately 133 million tons. Combining with the demand terminal breakdown, India's steel consumption is highly concentrated in the construction industry and infrastructure sectors: construction accounts for about $43\%$ , infrastructure accounts for about $25\%$ , engineering and packaging account for about $22\%$ , and these three sectors have covered the vast majority of steel demand, while the automotive and defense-related manufacturing sectors account for relatively limited proportions. In recent years, India has focused on manufacturing revitalization and upgrading of the domestic supply chain. According to the official data disclosed by the Indian government, India currently has a policy system with the overall strategy of "Make in India", the development concept of "Amenabar Bharat" (self-reliant India), and the core implementation tool of Production Linked Incentive (PLI), promoting manufacturing expansion, capacity implementation and domestic supporting capacity improvement. Against this background, the Indian government has carried out the "PM Gati Shakti National Infrastructure Construction Plan" to coordinate the planning of the national transportation and logistics system, focusing on promoting multi-mode connectivity, trunk transportation and logistics corridor construction. At the urban level, through the Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT), systematic efforts are made to promote the construction of urban transportation, municipal pipelines, public utilities and public services. In the fiscal implementation aspect, according to the disclosure of the Indian government, in the Union Budget 2025 - 26, the central government will arrange capital expenditures of approximately 11.21 trillion rupees (about 135 billion US dollars, accounting for about $3.1\%$ of GDP), of which the expenditures directly related to infrastructure are highly concentrated in the transportation and urban construction fields: Capital expenditure on railways is 4.44 trillion rupees, highways are about 3.32 trillion rupees, and urban infrastructure is about 4.26 trillion rupees, accounting for $3.8\%$ , and the total is about 81.92 trillion rupees, accounting for $73.1\%$ of the central government's capital expenditures. Chart 11: India's Economic Development Sources: Wind, iFinD, CITIC Futures Chart 12: The proportion of end-use for steel in India Sources: TATA, CITIC Futures Chart 13: Overview of Industrialization Promotion Policies for Key Countries of ASEAN and India <table><tr><td>Country</td><td>Infrastructure and Manufacturing Policies</td><td>Representative Projects</td></tr><tr><td>Vietnam</td><td>1. At the national level, major railway and hub projects are promoted, and integrated investment in "transportation corridors - ports - industrial clusters" is strengthened. 2. Based on the 23rd decision of the Political Bureau of the Central Committee of the Communist Party of Vietnam in 2018 as the top-level guiding document, it is clearly stated that "formulate the national industrial development policy until 2030, and the vision until 2045", establishing manufacturing and industrial system construction as the core pillar of national modernization and long-term growth, focusing on promoting industrial</td><td>1. North-South High-Speed Railway: The Congress approved the investment policy in 2024, and the government promoted its implementation preparation and set the start time schedule. 2. Old Street - Hanoi - Da Nang Railway: The construction starting point and investment scale were disclosed by the end of 2025. It is one of the typical infrastructure projects in Vietnam in recent years. 3. Expansion and Foreign Investment Absorption of Northern/Southern Manufacturing Industrial Parks, focusing on electronics, machinery, and component industries. 4. NVIDIA Artificial Intelligence Data Center.</td></tr><tr><td></td><td>structure upgrading, enhancing the added value and competitiveness of manufacturing, and strengthening the position of the industrial chain and value chain.</td><td></td></tr><tr><td>Malaysia</td><td>1. The main framework for medium- and long-term reforms and investments is "Ekonomi MADANI (2023)", and development-oriented expenditures are continuously arranged through the annual fiscal budget to accelerate the implementation of key infrastructure investments in transportation logistics, public services, and digital/energy sectors. At the same time, on the energy side, the "National Energy Policy (DTN) 2022-2040" and "National Energy Transition Roadmap (NETR) 2023" are used as the starting points to strengthen the construction of power infrastructure such as grid upgrades, renewable energy integration, and energy storage, providing a foundation for industrial upgrading and emerging digital economies. 2. Centered on the New Industrial Master Plan 2030 (NIMP 2030), efforts are made to promote the transformation and upgrading of manufacturing towards advanced manufacturing, electronic and electrical, mechanical equipment, and green industries. Manufacturing remains a long-term support sector for steel demand.</td><td>1. Penang Light Rail Transit. 2. MRT3 (Klang Valley MRT3). 3. Pan Borneo (Phase 1 of Sabah), large-scale flood control and water management projects, etc. 4. NIMP 2030 Key Cluster/Value Chain Projects (advanced manufacturing, E&E, key materials, etc.).</td></tr><tr><td>Thailand</td><td>1. 20-Year National Strategy 2018-2037 (National Strategy): "Upgrade of transportation and logistics infrastructure" is regarded as an important lever for enhancing national competitiveness and regional hub capabilities, emphasizing infrastructure and logistics system construction. 2. Thailand has adopted the "Thailand 4.0" strategy and the Thirteenth National Economic and Social Development Plan (2023-2027) as its top-level frameworks for industrialization, driving the manufacturing sector toward higher value-added development through key industrial corridors. Among these, the Eastern Economic Corridor (EEC) has been designated as the core implementation vehicle, focusing on attracting advanced industries such as automotive/electric vehicles (EV), electronics and electrical appliances, machinery and equipment, as well as petrochemicals and new materials.</td><td>1. The China-Thailand Railway (Bangkok - Nong Khai Direction): As an important railway project for regional connectivity and logistics hubs, the progress is continuously disclosed. 2. Construction of the Eastern Economic Corridor (EEC) Industrial Corridor: Industrial Park clusters, manufacturing investment, and export-oriented industrial layouts are being promoted in the three provinces of Nakhon Luang, Chonburi, and Roi Et. 3. Implementation of EEC industrial parks and advanced manufacturing projects (automobile/EV complete vehicles and components, electronics, electrical equipment, etc.).</td></tr><tr><td>Indonesia</td><td>1. The new capital Nusantara/IKN is being continuously developed as a national strategic project (including the administrative core area, municipal roads, water supply and power supply, green buildings, etc.). 2. With "Making Indonesia 4.0" as the main policy for manufacturing transformation, the priority manufacturing sectors are clearly defined, industrial digitalization and industrial chain upgrading are promoted, and the goal is to strengthen manufacturing as the engine of economic growth.</td><td>1. Construction of the new capital. 2. "Industry 4.0" demonstration factory/digital transformation project. 3. National-level comprehensive transportation and logistics infrastructure project (land, sea and air transportation system, ports, urban public service network, etc.).</td></tr><tr><td></td><td>3. With the "National Medium-Term Development Plan (RPJMN 2020-2024)" as the overall policy framework for medium-term planning, infrastructure is clearly positioned as a key public investment tool for enhancing connectivity, logistics efficiency and industrial carrying capacity, and it is continuously implemented through the annual fiscal budget.</td><td></td></tr><tr><td>Philippines</td><td>1. With the Philippine Development Plan (PDP) 2023-2028 as the medium-term policy framework, the "Revitalizing Industry/Manufacturing" section emphasizes promoting the upgrading of manufacturing through investment incentives and support for key industries; and supports the development of manufacturing through investment incentive tools such as the Strategic Investment Priority Plan (SIPP). 2. With the infrastructure chapter of PDP 2023-2028 as the top-level framework, the Build Better More (BBM) plan and the Infrastructure Flagship Projects (IFPs) list were constructed.</td><td>1. Manila Metro, the first underground heavy-duty metro in the Philippines, is a core urban rail transit project within the BBM/IFP system. 2. The Bridge across Manila Bay. 3. Mindanao Railway Project (Carmalao Railway) It covers the major cities in the southern part of the Philippines.</td></tr><tr><td>India</td><td>1. The PM Gati Shakti National Master Plan serves as a cross-departmental and cross-transportation mode project coordination and data platform, enhancing multimodal transportation and project implementation efficiency. 2. The manufacturing policy is centered around "Make in India + Production Linked Incentive" (PLI), providing incentives linked to output to multiple departments, covering various manufacturing sectors such as electronics, automotive and component manufacturing, and special steel; and through the PM Gati Shakti National Master Plan, strengthening the national multimodal transportation and logistics channels required for manufacturing.</td><td>1. The Delhi-Mumbai Expressway Corridor is a typical "highway transportation corridor" project. 2. Dedicated freight railway corridor. 3. PLI key sector expansion and localization projects, covering electronics, automotive/components, special steel, etc. 4. Multimodal transportation/industrial corridor/logistics park projects under the Gati Shakti framework.</td></tr></table> Sources: Vietnamese government, Indian Ministry of Finance, Indonesian Cabinet Secretariat, Malaysian government, Philippine NEDA, Thai government, CITIC Futures Research Institute compiled # 3. The core driver of steel demand Based on the WSA statistics, the analysis of the end-use structure of steel in various countries and the total consumption of steel reveals that at the present stage, the steel consumption in major economies of ASEAN and India is highly concentrated in the fields related to construction and infrastructure. Infrastructure and construction steel account for a relatively high proportion in the total steel consumption of each country, and the corresponding absolute quantities occupy a dominant position in the total regional steel demand. Chart 14: The total amount of steel used for infrastructure and construction in various countries is calculated <table><tr><td>Country</td><td>Malaysia</td><td>Thailand</td><td>Indonesia</td><td>Vietnam</td><td>Philippines</td><td>India</td><td>Total</td></tr><tr><td>Ratio of infrastructure construction + consumption of construction steel</td><td>63.2%</td><td>56.5%</td><td>40.0%</td><td>89.0%</td><td>81.0%</td><td>68.0%</td><td>67.3%</td></tr><tr><td>Infrastructure construction + consumption of construction steel (estimated, thousand tons)</td><td>4236.29</td><td>9087.40</td><td>7058.32</td><td>18841.30</td><td>7650.61</td><td>90326.31</td><td>137200.23</td></tr></table> Sources: WSA, iFinD, CITIC Futures, the data is up to the end of 2023. Based on the end-use structure of the six countries mentioned earlier, steel consumption currently exhibits a highly concentrated sectoral characteristic: regardless of whether the economies are of low income or middle income, the demand for steel is mainly driven by the construction and infrastructure sectors, with a proportion generally ranging from $55\%$ to $90\%$ , and the corresponding absolute consumption volume holds a decisive position in the total steel consumption. This structural fact indicates that in the actual environment of ASEAN and India, steel demand mainly depends on the strength of investment in construction and infrastructure. The research on steel demand should focus more on the development stage of the economy, such as important economic indicators like per capita GDP and urbanization rate. Therefore, we also referred to the theories and practices in academic literature on steel research. Studies by Crompton (1999), Wandebori and Murtyastanto (2023), and others, all with the core framework of the Steel Intensity of Use (I-U) theory, systematically analyzed the relationship between steel consumption and economic development. The Steel Intensity of Use is defined as the per capita steel consumption per unit of GDP, and the core hypothesis is that the relationship between steel I-U and per capita GDP typically shows an inverted U-shaped pattern, that is, it grows rapidly as per capita GDP rises in the early stage of economic development and gradually declines in the mature stage. In the low-income and middle-income stages, the Steel Intensity of Use increases significantly with per capita GDP; while in the high-income stage, as the industrial structure shifts towards service and technology-intensive industries, the Steel Intensity of Use tends to decline. In the empirical analysis, Wandebori and Murtyastanto (2023) further used multi-country data to test the correlation between steel I-U and per capita GDP. The study showed that the correlation coefficients between countries at different economic development stages were significantly different: lower-income countries such as India and Vietnam showed a positive correlation, while high-income countries such as South Korea, Japan, Germany, and the United States showed a significant negative correlation. This difference was summarized as a "waveform structure", indicating that steel demand is most sensitive to per capita GDP in the economic take-off stage and gradually weakens in the high-income stage. Chart 15: Curve Chart of Steel Usage Intensity Chart 16: Correlation between Steel Utilization Intensity (IU) and Per Capita GDP in Some Countries Sources: "The Implication of Steel-Intensity-of-Use on Economic Development", CITIC Futures <table><tr><td></td><td>India</td><td>Vietnam</td><td>Indonesia</td><td>China</td><td>Malaysia</td><td>Russia</td><td>South Korea</td><td>Japan</td><td>Germany</td><td>USA</td></tr><tr><td>Pearson Correlation</td><td>0.334</td><td>0.869 **</td><td>0.640 **</td><td>-0.019</td><td>-0.833 **</td><td>0.048</td><td>-0.887 **</td><td>-0.614 **</td><td>-0.572 **</td><td>-0.702 **</td></tr><tr><td>Significant level</td><td>0.129</td><td>0.000</td><td>0.001</td><td>0.932</td><td>0.000</td><td>0.833</td><td>0.000</td><td>0.002</td><td>0.005</td><td>0.000</td></tr><tr><td colspan="11">*Correlation is significant at the 0.05 level (I-tailed). **Correlation is significant at the 0.01 level (I-tailed). For the correlation with no *, it is not significant.</td></tr></table> Our research also finds a similar pattern. Low-income countries tend to exhibit higher elasticity of steel usage intensity, and this elasticity converges as per capita GDP increases, eventually showing a certain inverse correlation. This can be observed in the WSA's 2023 global table of apparent demand for over 100 economies. Chart 17: The steel usage intensity developed countries has declined in Chart 18: The steel usage intensity in emerging countries shows an inverted U-shaped pattern Sources: iFinD, CITIC Futures Sources: iFinD, CITIC Futures This study also introduces the urbanization rate as an important basis. The research by Wandebori and Murtyastanto (2023) indicates that per capita GDP can effectively depict the development stage of steel demand, while the urbanization process closely related to industrialization and infrastructure construction constitutes an important driving mechanism for steel demand. Moreover, Crompton's (1999) research also shows that per capita GDP is the core variable for depicting the development stage of steel demand, and the urbanization process closely related to infrastructure construction and investment expansion constitutes an important structural driving force for the growth of steel demand. Therefore, in the research on steel demand in ASEAN and India, we use per capita GDP and urbanization rate as key exogenous variables. # 4. Steel Demand Forecasting in Southeast Asia and India - A Three-Model Approach The ASEAN-5 and India share many economic characteristics with other major emerging economies in East Asia—namely mainland China, South Korea, and Taiwan Province of China. Moreover, the development trajectories of these three major East Asian economies (excluding Japan) are temporally closer to the present day compared with those of developed economies, and their data availability is relatively robust. Accordingly, we select mainland China, Taiwan Province of China, and South Korea as sample economies, using them as reference benchmarks to discuss the future steel demand potential of the ASEAN-5 and India over the coming years. In terms of economic scale, India's large population implies that its current and prospective domestic demand levels significantly exceed those of the ASEAN-5. Furthermore, India's current economic model is not export-oriented manufacturing-driven. Consequently, we believe that the development path of the ASEAN-5 will be more closely aligned with that of South Korea and Taiwan Province of China, while India exhibits characteristics more akin to mainland China. In comparative analysis across different stages of development, we will place greater emphasis on the relevant experiences of economies whose characteristics match more closely. Chart 19: When measured by the proportion of trade to GDP, the degree of India's economic openness is far lower than that of the ASEAN-5 Sources: iFinD, CITIC Futures, Data for Vietnam in 2024 is missing However, when the per capita GDP reaches around 12,000 - 20,000 US dollars, there will be a significant slowdown in growth, followed by a stable or even slight downward trend. The per capita GDP and per capita steel consumption in the ASEAN-5 and India are still relatively low. From the perspective of inter-country differences, Malaysia and Thailand, due to their higher development levels, have relatively moderate growth rates in demand. As of 2023, the per capita steel consumption in Vietnam has exceeded $200\mathrm{kg}$ per person, and India has also approached $100\mathrm{kg}$ per person, which is in line with its development stage. The per capita steel consumption in the Philippines and Indonesia has grown more slowly compared to Vietnam and India and is lower due to their lower per capita GDP levels. The per capita steel consumption levels in the Philippines and Indonesia are relatively low, and the overall growth rhythm is relatively slow. Furthermore, we have also found that the more export-oriented economies, the more significant and higher their per capita steel consumption will be. Therefore, we believe that currently, Vietnam, Thailand, and Malaysia are closer to the development path of South Korea and Taiwan, and their per capita steel consumption may increase to a relatively high level; while the Philippines, India, and Indonesia are closer to the development path of China, and the upper limit of their per capita steel consumption may be lower than that of the other several economies in the region. Chart 20: The per capita steel consumption of various countries generally shows a "first increasing then decreasing" relationship with the overall per capita GDP Sources: iFinD, WSA, IMF, CITIC Futures Chart 21: The per capita GDP and steel consumption in ASEAN and India are not high capita steel consumption stabilized Sources: iFinD, WSA, IMF, CITIC Futures Sources: iFinD, WSA, IMF, CITIC Futures From the perspective of per capita GDP, we utilized the IMF's predicted data on per capita GDP and population growth for the six countries to forecast steel consumption in 2030. The IMF's projection for the growth rate of per capita GDP in the next five years is relatively optimistic. The nominal per capita GDP growth rate of all countries except Indonesia is above $5\%$ , with India exceeding $9\%$ . Considering that India's economy has surpassed Japan and ranked fourth globally by 2025, India may become one of the countries contributing the most to the increase in steel demand in the coming years. Moreover, at present, India's per capita GDP is close to that of China 20 years ago, when China was in the early stage of vigorous development of real estate and infrastructure projects. Therefore, from the perspective of stage comparison, India's steel demand has great potential for growth. From the perspective of urbanization rate, we analyzed the medium-term forecast of UNCTAD on the urbanization process of major economies worldwide. UNCTAD's projection shows that the overall increase in urbanization rates of the ASEAN-5 and India will be relatively limited, with the increase generally not exceeding 5 percentage points, which is lower than the expected growth rate of their per capita GDP. Among them, Vietnam has the largest increase in urbanization rate, with an increase of approximately 4.3 percentage points compared to the projected value in 2024. By comparing the historical data of other economies in East Asia, it can be seen that when the urbanization rate is in the range of $30\% - 60\%$ , per capita steel consumption has a high growth elasticity for urbanization changes; while when the urbanization rate approaches or exceeds $70\%$ , its marginal pull on steel demand significantly weakens and tends to plateau. South Korea sustained strong growth due to its economic structure characteristics. Therefore, the marginal contribution of urbanization to future steel demand may overall be weaker than per capita GDP. From the perspective of the population, the IMF predicts that the population growth rate of the six countries will be relatively stable in the coming years. Among them, the population growth rate of Vietnam is on a downward trend, Thailand maintains low-speed growth, while the population growth rates of India, the Philippines, and Indonesia are relatively fast. We will multiply the predicted values of per capita steel consumption by the population projections for each year and finally calculate the increase in steel demand for the six countries in the next five years. Then, by comparing the existing data, we can calculate the growth rate. Chart 23: The per capita steel consumption Chart 24: After Taiwan's urbanization rate and urbanization rate in ASEAN and India are exceeded $70\%$ , the per capita steel positively correlated consumption stabilized Sources: iFinD, IMF, CITIC Futures Sources: iFinD, IMF, CITIC Futures Chart 25: The IMF predicts that the per capita GDP of these six countries will grow at a relatively fast rate in the future Sources: iFinD, IMF, CITIC Futures Chart 26: UNCTAD's outlook for the growth of urbanization rates is relatively stable Sources: iFinD, IMF, CITIC Futures Chart 27: The IMF predicts that the growth rates of the population in these six countries will diverge in the future Sources: iFinD, IMF, CITIC Futures Chart 28: The population growth rates in Indonesia and the Philippines are expected to remain high Sources: iFinD, IMF, CITIC Futures Based on the forecast values from the IMF and UNCTAD, to systematically depict the differences in development stage, population structure, and industrial path among various economies, we have constructed and integrated three complementary forecasting models, each measuring from the perspectives of steel consumption intensity, per capita steel consumption trend, and historical path benchmarking. Each model conducts parameter estimation and fitting tests within the historical sample period and is weighted and integrated based on its historical explanatory power to enhance the robustness of the forecasting results. The first method employs elastic net regression, with explanatory variables being standardized per capita GDP and urbanization rate, to predict steel usage intensity (IU). Compared to traditional OLS, elastic net regression can simultaneously achieve variable selection and parameter contraction, addressing issues of variable collinearity and overfitting. The regularization strength parameter is set to $\alpha = 0.1$ , and the weight ratio of L1 and L2 penalty terms is set to 0.5. We use the predicted values of per capita GDP and urbanization rate to predict steel usage intensity and then multiply by the GDP projection value of the corresponding year to obtain the final total steel consumption. The second method is a per capita steel consumption regression model, whose core logic assumes that there is a certain direct linear/non-linear mapping relationship between per capita steel consumption and per capita GDP, as well as urbanization process. We construct a model with per capita GDP and urbanization rate as exogenous variables, combined with the per capita GDP forecast values, urbanization rate forecast values, and population forecast values from the IMF and UNCTAD, to predict total steel consumption. The third method is to build a historical path trend benchmarking model. Based on the assumption of similar economic development stages, we benchmark the historical steel consumption paths of economies that have undergone early industrialization, inferring future demand growth for the target country. The stage-matching method uses the average per capita GDP of the target country from 2019 to 2023 as the anchor point, and searches for the five-year time window with the closest per capita GDP level in the historical data of the benchmark economies (China, Japan, South Korea, and Taiwan, China). The method for constructing the trend similarity weight is to calculate the compound growth rate of steel consumption in the target country's recent five years and the compound growth rate of the corresponding window in the benchmark economies. Based on trend similarity, country-specific characteristics are corrected. Chart 29: Overview of Three Models <table><tr><td>Projection method</td><td>Core logic and mathematical principle</td><td>Key parameters/assumptions</td><td>Analysis of advantages and disadvantages</td></tr><tr><td>1. Elastic Net</td><td>Mixed Regularization Linear Regression: Combining L1 (Lasso) and L2 (Ridge) penalty terms. First predict the intensity (IU), then multiply by GDP to obtain the total amount.</td><td>α = 0.1; L1_ratio = 0.5; Input variables: Standardized per capita GDP, Urbanization rate.</td><td>Advantages: Automatically handles variable collinearity, prevents model overfitting, and has a parameter contraction function. Disadvantages: Limited ability to capture economic structural sudden changes.</td></tr><tr><td>2. Per capita consumption regression model</td><td>Exogenous variable mapping: Based on the direct mapping relationship between per capita steel consumption and macroeconomic indicators (GDP, urbanization).</td><td>Rely on the per capita GDP, population and urbanization rate projection data provided by the IMF/UNCTAD.</td><td>Advantages: The logic is clear and intuitive, directly linking the demographic dividend to economic growth. Disadvantages: Highly dependent on the accuracy of data from external institutions.</td></tr><tr><td>3. Historical trend benchmarking</td><td>Stage similarity assumption: Infer the historical paths of the economies that were initially industrialized (China, Japan, South Korea, Taiwan) based on similar stages.</td><td>Anchor point: The average per capita GDP for the period 2019-2023; Weight: Based on the similarity of the 5-year compound growth rate (CAGR) trends.</td><td>Advantages: Takes into account the regularities of the industrialization process; Can be flexibly adjusted according to national characteristics (for example, India compares with China). Disadvantages: Affected by the differences in historical background and current environment of benchmark economies.</td></tr></table> Sources: CITIC Futures Finally, to reduce the projection errors of a single model, the steel demand projection results adopt a dynamic weighted average of the projection accuracy of the above three forecasting methods to obtain the final projection value. We expect per capita steel consumption in India and the Philippines has grown rapidly in recent years. Although the per capita consumption in the Philippines is still at a low level, with the implementation of multiple infrastructure projects, the growth rate of per capita steel consumption is expected to accelerate. The per capita steel consumption in Indonesia and Thailand shows a long-term trend of slow increase. After experiencing rapid growth in per capita steel consumption in the early years, Vietnam's growth rate may slow down in the coming years. Malaysia may show a continuous decline trend. Under the conditions of high urbanization and mature economic structure, the additional space for steel demand growth is relatively limited. In summary, India is likely to become the absolute main force in terms of steel demand growth. Chart 30: India is likely to become a growth hotspot for steel demand in the medium term <table><tr><td></td><td>India</td><td>Thailand</td><td>Indonesia</td><td>Philippines</td><td>Malaysia</td><td>Vietnam</td><td>Total</td></tr><tr><td>2030F, megaton</td><td>183.7</td><td>18.2</td><td>21.7</td><td>12.3</td><td>6.6</td><td>27.4</td><td>269.8</td></tr><tr><td>2023A, megaton</td><td>132.8</td><td>16.1</td><td>17.6</td><td>9.4</td><td>6.7</td><td>21.2</td><td>203.9</td></tr><tr><td>CAGR</td><td>4.7%</td><td>1.8%</td><td>3.0%</td><td>3.8%</td><td>-0.3%</td><td>3.7%</td><td>4.1%</td></tr><tr><td>Annual compound growth rate, megaton</td><td>6.3</td><td>0.3</td><td>0.5</td><td>0.4</td><td>0.0</td><td>0.8</td><td>8.3</td></tr></table> Sources: MySteel, iFinD, CITIC Futures We predict that by 2030, the total steel consumption of the ASEAN-5 and India is expected to increase from 2023's 204 million tons to 270 million tons, with a compound annual growth rate of approximately $4.1\%$ . From the historical trend, the average annual compound growth rate of global steel apparent consumption from 2010 to 2023 was about $2.33\%$ , significantly lower than the growth rate and predicted growth rate of the six countries. In the next five years, there is a relatively high probability that the share of steel consumption of these six countries in the global total will further increase. From the perspective of incremental structure, India is the absolute core of demand growth. The steel consumption is expected to increase from 133 million tons to 184 million tons, with a cumulative increase of approximately 51 million tons, accounting for more than $70\%$ of the regional total increment. Within ASEAN, there is a significant differentiation: Vietnam's steel consumption increased from 21.2 million tons to 27.4 million tons, maintaining a stable expansion, but the growth rate has slowed compared to previous years; the Philippines had a relatively fast growth rate based on a low base, with consumption expected to increase from 9.4 million tons to 12.3 million tons; Malaysia and Thailand had smaller growth scales, and Malaysia even experienced negative growth. Indonesia's overall incremental contribution was limited, and the demand trend was relatively stable. Overall, the regional steel demand shows a structural characteristic of "India's strong pull, and regional diff