Chinese Automation Equipment for cold rolled stainless steel companies is accelerating their move to Southeast Asia, The US tariff increase is forcing the industry to transform its strategy.

As the US continues to increase tariff barriers on Chinese cold-rolled steel and its products, the domestic cold-rolled steel processing automation equipment industry is setting off a collective transformation of the "Southeast Asia strategy". The latest industry data shows that China's exports of Cold rolled stainless steel production equipment to Southeast Asia in the first half of 2024 surged 45% year-on-year, becoming a bright spot in the foreign trade environment.

Market reconstruction under the tariff stick

The latest tariff list of the US Department of Commerce shows that Chinese-made Automated Cold Rolling Mill for stainless steel is included in the 25% punitive tariff range, which directly led to a 62% year-on-year drop in exports to the US from January to May this year. "We originally had 30% of our production capacity for the US market, and now we must urgently turn." The foreign trade director of a leading enterprise in Guangdong revealed.

In sharp contrast, the Southeast Asian market is experiencing explosive growth. After the RCEP, Vietnam, Indonesia, and other countries generally reduced import tariffs on cold-rolled equipment to below 5%. According to statistics from the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, in the first quarter of 2024, China's exports of Cold Rolling equipment to ASEAN reached US$870 million, exceeding 60% of last year's total amount.

Industrial chain transfer creates new opportunities

Five brand-new High-efficiency stainless steel processing lines are being installed simultaneously in the China-invested Industrial Park in Haiphong City, Vietnam. "These are all prepared to take over the orders for automobile plates transferred from China." The project leader said that the park alone purchased 230 million yuan worth of Chinese-made intelligent rolling mills.

Industry experts pointed out that three major demand hotspots are forming in Southeast Asia:

Vietnam: Demand for automobile plate processing equipment increased by 35% annually

Indonesia: Concentrated release of stainless steel cold rolling line transformation projects

Thailand: High-end home appliance plate production line upgrade trend

Intelligent green equipment has become the focus of competition

Facing strong competition from Japanese and Korean companies, Chinese manufacturers are breaking through with a combination of "intelligent + green". Jiangsu Yuanjing Automation's latest hydrogen-assisted rolling system has received batch orders from Thailand's new energy vehicle supply chain.

Market research shows that the premium capacity of intelligent models with remote operation and maintenance functions is 20-25%, and they are rapidly seizing the mid-to-high-end market. In the newly signed contracts in 2024, the proportion of smart devices has jumped from 28% last year to 42%.

Concerns and challenges coexist

However, this new blue ocean also hides reefs. Indonesia's recent requirement of "40% local content" has led to the delay of several projects under construction. The Vietnam Chamber of Commerce and Industry warned that a special sales tax may be imposed on imported equipment.

"The most troublesome thing now is the payment period." The Southeast Asia manager of a Zhejiang equipment supplier admitted, "Local customers generally require a 9-month payment period, and the financial pressure is three times that of domestic customers."

Future Outlook: Intelligent Competition Accelerates

Industry forecasts show that the Southeast Asian Cold rolled stainless steel processing machinery market will maintain an average annual growth rate of 18% from 2024 to 2026, and the scale will exceed US$3.5 billion by 2026. With the deepening implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP), Chinese equipment suppliers are expected to obtain more than 60% of the market share.

But experts also reminded that as Japanese and Korean companies accelerate their localization efforts, market competition will enter a white-hot stage after 2025. "The key to success in the future will be who can leap from 'equipment export' to 'standard output' faster," said a relevant person in charge of the China Iron and Steel Association.