Jiji Press reported that Japanese steelmakers are expanding into high end product markets in Southeast Asia in an effort to survive fierce competition with Chinese and South Korean rivals.

The supply of ordinary steel products exceeds demand among the member economies of the Association of Southeast Asian Nations due to a massive inflow of surplus products from China, where local steelmakers have been boosting output beyond domestic consumption capacity.

In 2012, China replaced Japan as the top steel exporter in the ASEAN region with a 31 percent share that surpassed Japanese products’ 28 percent, according to the Japan Iron and Steel Federation.

Given the stepped-up exports by China and South Korea, which came third with a 15 percent share that year, industry officials agree that the steel supply in Southeast Asian markets will continue to be excessive.

Concerned about the situation, Japan’s JFE Holdings Inc. has postponed its decision on whether to join a Taiwanese steel production project in Vietnam.

Demand for high end steel products, mainly from automakers and electric makers, remains robust there, as such products combine strength and high processability, according to industry experts, who say Japanese producers have a technical edge in the field over their Chinese and South Korean rivals.

Nippon Steel & Sumitomo Metal Corp started production of such products in Thailand in October and Vietnam in November. It also plans to launch output in India in January and expand production lines in China in 2015.

JFE began to produce high end products in Thailand in April and is preparing to do so in Indonesia in March 2016.

Kobe Steel Ltd is set to start making high-quality products in China in early 2016.