Cambodian “iron and steel” imports in the first four months of the year clocked in at $129.043 million, rising by 7.78 per cent year-on-year from $119.722 million and by 11.1 per cent half-on-half (compared to July-October 2022) from $116.10 million, according to provisional Customs (GDCE) statistics.
This category of items, corresponding to Chapter 72 of the Harmonised System (HS) of Tariff Nomenclature, accounted for 1.628 per cent of the $7.927 billion value of the Kingdom’s total merchandise imports over the four months – compared to 1.192 per cent and $10.043 billion in January-April 2022, as well as 1.167 per cent and $9.953 billion in July-October 2022.
The GDCE did not reveal any tonnage figures. To clarify, these imports do not include “articles of iron or steel”, which instead fall under Chapter 73 of the tariff schedule.
Cambodia Constructors Association general manager Chiv Sivpheng told The Post on May 17 that the local construction sector continues to feel the pressure of the global economic downturn triggered by the Ukraine crisis and other geopolitical flashpoints.
The slowdown in construction activity has prevented the industry’s demand for iron and steel from increasing further, he said.
He opined that the recovery of imports of iron, steel, and other construction materials has been rather tepid, explaining that construction typically recovers more slowly than other sectors after a difficult period.
“Nonetheless, the uptick in iron and steel imports signals that Cambodia’s construction sector and economy are bouncing back from the Covid-19 crisis. Imports of iron and steel for the construction sector will accelerate once other sectors are fully up and running, and demand for homes, offices and other facilities heals,” he said.
According to Sivpheng, numbers of formal applications for investment projects in the construction sector have increased from levels seen in 2021 and 2022.
Last month alone, the Kingdom imported $35.752 millions worth of “iron and steel”, up 0.3 per cent from $35.636 million in April 2022 (year-on-year), up 18.8 per cent from $30.090 million in October 2022 (half-on-half), up 13.1 per cent from $31.615 million in January 2023 (quarter-on-quarter), and up 4.50 per cent from $34.213 million in March 2023 (month-on-month), according to GDCE figures.
This was the highest monthly figure since $35.920 million in June 2022, and is still down 29.1 per cent from the record $50.422 million registered in May 2019, as indicated by GDCE statistics for the 2015-2023 period.
Chapter 72 items accounted for 1.730 per cent of the $2.067 billion value of the Kingdom’s total imports in April 2023 – compared to 1.372 per cent and $2.597 billion in April 2022, 1.465 per cent and $2.053 billion in October 2022, 1.645 per cent and $1.922 billion in January 2023, and 1.489 per cent and $2.298 billion in March 2023.
Global Real Estate Association president Sam Soknoeun argued that domestic production of iron and steel is on an uptrend, further slowing overseas purchases of these materials. Even so, the “slight” recent increases in imports underscore that the construction sector is not as bogged down as it had been a couple years ago, he claimed.
“Due to the interconnectedness of the two markets [construction and real estate], it may take at least another year for iron and steel imports to enjoy strong growth,” he said, noting that the real estate market’s performance has improved from 2020-2022.
Still, investors have expressed interest in producing steel in the Kingdom to capitalise on the growing domestic market and provide a viable homegrown alternative to imports.
One such example is the Chinese-owned Hong De Sheng (Cambodia) Steel Co Ltd, whose $16.7 million steelworks in Kampong Speu province opened in early December 2020. In its initial stage, the factory was said to have an annual production capacity of 500,000 tonnes.
The GDCE put last year’s “iron and steel” imports at $359.819 million, or up 23.08 per cent against $292.339 million a year earlier. This constituted 1.202 per cent of the total $29.942 billion value of the merchandise that the Kingdom imported throughout the year.
Trading Economics data 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).