Thailand's steel sector outlook

South East Asia Iron and Steel Institute (SEAISI) said that Thailand's position in terms of steel production and consumption is significant in South East Asia. Thailand consumed more than 14.1 million tons of steel in 2005, an increase of 8 percent from a year earlier. Steel consuming sectors such as construction, automotive and appliances contribute to the Thailand's steel industry. The growth in steel industry is as follows: Thailand Steel Consumption (in million tons)

 

                 2002        2003       2004      2005 

Production       6.7         7.5        9.0       9.4

Import           4.7         5.1        6.0       6.7

Export           1.5         1.6        1.9       1.9

Apparent        10.0        11.0       13.1      14.1
Consumption 

SEAISI indicated that growing import shows that there are opportunities for new capacities in the nation. Thailand's steel industry is structurally unbalanced due to the insufficient upstream industry. Weak or non-existent iron making causes Thailand to depend on imported scrap, pig iron and semi-finished steel in the form of billets and slabs as well. The development of upstream steel units in the form of iron and steel making will strengthen the industry supply chain and stabilize the whole industry. Regional steel companies are interested in investing in the steel sector due to the steadily growing demand from construction, automotive and appliances sectors. SEAISI also cited that most of the imported steel products are in the form of higher grades of steel. Imported flat products are mainly used in automotive and appliances sectors, while imported wire rods are used in cold heading and high carbon quality. There are also some consolidation movements seen in the Thailand's steel industry. This situation may create a regional leader in the log run with solid capabilities.