Thai Government tracks steel bar prices in local market

Thai Government tracks steel bar prices in local market

The Thai steel bar makers are under inspection with the purpose of determining whether there is a case of stockpiling of the said material that creates shortage in the local market. According to a statement by the Thai Commerce Minister, in case evidence is found in respect of existence of such circumstances, the steel bars might be put in the price control list of the government. The Committee on Prices of Goods and Services will also study the situation to see whether the market prices soar too high, hurting the local users of steel bars in Thailand. The claim came from the Thai Contractors Association, alleging that the local steel makers and distributors are stockpiling the material and thus creating shortage in the domestic market. On the other hand, the president of Millennium Steel Plc., the largest steel bar producer in the country, defended that such a limitation of steel bar prices would lead to the local steel bar makers' permanent shut down of their facilities, as they already are struggling with debt. He explained that the price rise derived from the increasing raw material costs, such as scrap and billets in international markets, rather than a stockpiling. The strong demand from China has lead to such sharp rises of raw material prices. On the local producers' side, basing the construction contracts at lower price levels such as Baht 12'000 per ton, the contractors left themselves in a bottleneck where the actual market conditions require higher levels such as 14-15'000 Baht per ton. In case the Committee finds grounds for the accusations, it is entitled to exercise the 1999 Prices on Goods and Services Act for the steel bar prices.