Sharp increase in steel imports amid a construction boom

Construction of a mega interchange in Phnom Penh

The builders are preparing iron formwork cages for the construction of a mega-interchange in the Minchey area of Phnom Penh.

Increase in iron and steel imports

Cambodia imported over $280 million worth of iron and steel in the first nine months of 2023, which is a moderate increase compared to the same period last year.

This figure accounts for more than 1% of the country's total imports, according to the Main Customs and Tax Service (GUTNS).

According to the report from the International Trade Statistics of Goods by the State Customs Service, from January to September, the country imported goods under HS code 72, including iron and steel, totaling $280.53 million.

This is an increase of 3.2% compared to $271.78 million in 2022 and accounts for 1.54% of Cambodia's total imports amounting to $18.22 billion during this period for products under code 72.

In September alone, GUTNS reported imports of goods in this category amounting to $26.15 million, which is 3.2% less than in September 2022, when it was $27.02 million.

Improvement of the construction sector

Chiv Sivpheng, the CEO of the Cambodian Constructors Association (CCA), told The Post that the country's construction sector has shown some improvement this year.

He links this to the increase in the number of projects approved by the Ministry of Land Management and Urban Development and regional authorities.

He notes that the recovery of the sector has been gradual, mainly due to the uncertainty of many large investors, who are foreign investors, to invest funds because of the current global political and economic uncertainty.

Decrease in the construction of new facilities

He notes that the decrease in the construction of new facilities is related to the reduction in the import of materials.

He also mentions that although there are several steel mills operating in the country, a significant portion of the steel used in the construction industry is supplied from Vietnam, China, and Thailand.

“The construction industry usually lags behind other sectors in recovery. Events such as the war between Russia and Ukraine and conflicts in the Middle East affect national economies, including our construction industry,” he explained.

“However, I look at 2024 optimistically as an improvement over the current situation,” he added.

Issues with large projects

Huy Vanna, the Secretary General of the Cambodian Housing Development Association (CHDA), said that the country's construction industry has been facing challenges since 2020, particularly with large projects being carried out by foreign investors.

He said that the reduction in the number of large-scale projects has led to a decrease in steel demand compared to the levels before 2020.

He added that the current construction primarily serves the needs of the local population and is funded by domestic companies.

"The health of the construction industry is closely linked to global economic trends.

Development of the steel industry

On September 20, the Cambodian Development Council (CDC) issued the final registration for Huale Steel (Cambodia) Co Ltd.

Located in the Special Economic Zone of Sihanoukville Port in Preah Sihanouk Province, the company has capital investments of $40 million and plans to create over 500 jobs.

Historically, steel mills are located in the provinces of Banteay Meanchey and Kampong Speu.

The total amount of iron and steel imports

For reference, the Kingdom imported iron and steel worth a total of $359.819 million in 2022, which is 23.1% more than the $292.339 million in the previous year.

The country's spending on iron and steel imports accounted for about 1.2% of the total value of all imported goods in 2022.