Posted on 05 Mar 2024
The latest newsletter from The Federation of Thai Industries (FTI) on Monday 4 March showed that Thailand's industrial sector is worried that cheap and inferior products are invading the Thai market, thus reducing the sales of local products by 10%-30%.
The Iron and Steel Institute of Thailand (ISIT) quoted F.T.I Chairman Kriengkrai Thiennukul's statement that the Thai industry is facing an influx of products from China competing for the market, and the steel industry is one of the industries most affected by the dumping and spillover of Chinese structural steel. As imported products are competitive, Thailand's steel capacity utilisation rate dropped to 31% in 2023, Kriengkrai Thiennukul pointed out.
"The trend this year will be worse. If government departments do not take timely action, then Thai steel mills will have to close down and lay off a large number of workers," Kriengkrai Thiennukul said. Most FTI executives believe production costs in Thailand have increased significantly due to electricity prices. Rising raw material costs, labour costs, interest rates and logistics costs have made it more difficult for Thai products to compete in the ASEAN market.
FTI therefore proposed solutions to the crisis in the steel industry. These include: prohibiting the expansion of local steel plants to resolve overcapacity; strictly implementing Thai Industrial Standards (TIS); Thai Ministry of Commerce should quickly carry out anti-dumping, countervailing and safeguards investigations; improving the inspection of the anti-dumping duties to avoid Chinese exporters and local importers from circumventing the payment of tariffs; and expanding government procurement of local steel products.
ISIT also mentioned that a safeguard duty of up to 25% is expected to be levied on all types of steel imports to Thailand, Kallanish learns.
Nawa Chantanasurakon, president of Sahaviriya Steel Industries Public Company Limited, revealed that Chinese steel is pouring into Thailand through dumping, subsidies and trade circumvention measures. Affected by this, Thai steel companies have to suspend operations and lay off employees. Research by Siam Commercial Bank found that every 100,000 tonnes of steel production lost in Thailand will lead to a 0.19% drop in Thailand's gross domestic product (GDP) and a 1.2% drop in employment in the steel industry.
Thai imports of finished steel rose by 4% year-on-year to 11.21 million tonnes, according to the ISIT. Its exports of finished steel dipped marginally by 0.6% y-o-y to 1.48mt in 2023 (see Kallanish passim).
Source:Kallanish
