China’s Steel Capacity Expansion Threatens the Thai Market
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The steel market in Thailand has experienced a serious decline this year due to the import of cheap steel products from China and China’s expansion of steel capacity within Thailand.
The Federation of Thai Industries (FTI) reported that over 12 million tons per year of steel capacity, funded by Chinese companies, is currently being developed in Thailand.
However, local steel producers in Thailand have had to halt production because of the impact of these steel imports from China. Consequently, the FTI has urged relevant authorities to limit the construction of steel plants backed by Chinese companies as it directly affects the operations of domestic producers.
Significant new investments include a hot-rolled flat steel mill with a capacity of 5.6 million tons per year and a steel coil plant with a capacity of 2.28 million tons per year. Both are being established by Sinke Yuan Company (Xinkeyuan) in Pluak Daeng city, Rayong province. Sinke Yuan’s projects also include several additional facilities approved by the Board of Investment of Thailand (BOI), such as a coated flat steel plant with a capacity of 2.03 million tons per year, a steel pipe plant with a capacity of 1.7 million tons per year, a cold-rolled flat steel plant with a capacity of 450,000 tons per year, and a structural steel plant with a capacity of 30,000 tons per year.
Additionally, China’s Yongjin Metal Technology Group is also expanding its presence in Thailand with plans to establish stainless steel production capacity of 330,000 tons per year, which has also received BOI approval.
The FTI has expressed concerns that these new capacities may exceed Thailand's current domestic steel demand, potentially leading to an oversupply situation, further worsening the market conditions. The Iron & Steel Institute of Thailand (ISIT) forecasts that Thailand’s finished steel consumption will increase modestly, with a projected growth of 2.5% in 2024 to 16.7 million tons, and an additional 2% increase to 17.1 million tons in 2025.
Currently, the steel industry’s capacity utilization in Thailand is at a record low, dropping below 30%. Industry insiders believe this decline is not only due to slow domestic demand but also the impact of extremely cheap imports from China, which they consider to be market-dumping behavior. In response, Thailand has raised standards for imported steel and is considering additional trade protection measures to shield the domestic industry from these negative impacts.
[/tintuc]
The steel market in Thailand has experienced a serious decline this year due to the import of cheap steel products from China and China’s expansion of steel capacity within Thailand.
The Federation of Thai Industries (FTI) reported that over 12 million tons per year of steel capacity, funded by Chinese companies, is currently being developed in Thailand.
However, local steel producers in Thailand have had to halt production because of the impact of these steel imports from China. Consequently, the FTI has urged relevant authorities to limit the construction of steel plants backed by Chinese companies as it directly affects the operations of domestic producers.
Significant new investments include a hot-rolled flat steel mill with a capacity of 5.6 million tons per year and a steel coil plant with a capacity of 2.28 million tons per year. Both are being established by Sinke Yuan Company (Xinkeyuan) in Pluak Daeng city, Rayong province. Sinke Yuan’s projects also include several additional facilities approved by the Board of Investment of Thailand (BOI), such as a coated flat steel plant with a capacity of 2.03 million tons per year, a steel pipe plant with a capacity of 1.7 million tons per year, a cold-rolled flat steel plant with a capacity of 450,000 tons per year, and a structural steel plant with a capacity of 30,000 tons per year.
Additionally, China’s Yongjin Metal Technology Group is also expanding its presence in Thailand with plans to establish stainless steel production capacity of 330,000 tons per year, which has also received BOI approval.
The FTI has expressed concerns that these new capacities may exceed Thailand's current domestic steel demand, potentially leading to an oversupply situation, further worsening the market conditions. The Iron & Steel Institute of Thailand (ISIT) forecasts that Thailand’s finished steel consumption will increase modestly, with a projected growth of 2.5% in 2024 to 16.7 million tons, and an additional 2% increase to 17.1 million tons in 2025.
Currently, the steel industry’s capacity utilization in Thailand is at a record low, dropping below 30%. Industry insiders believe this decline is not only due to slow domestic demand but also the impact of extremely cheap imports from China, which they consider to be market-dumping behavior. In response, Thailand has raised standards for imported steel and is considering additional trade protection measures to shield the domestic industry from these negative impacts.
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