The Thai steel industry is in crisis as 71 factories shut down due to a surge of cheap Chinese steel imports. This influx has led to significant financial losses and layoffs among manufacturers. Industry leaders call for urgent government intervention and propose strategic guidelines to support local production and competitiveness, particularly through low-carbon manufacturing strategies.
The Thai steel industry is facing severe challenges due to an influx of inexpensive Chinese steel, leading to the closure of 71 factories in 2024, as reported by Krungthep Turakij. This crisis is largely attributed to increased steel production in Chinese factories located in Thailand, as well as exports from China to ASEAN countries, which have reached approximately 110 million tonnes this year.
Major Thai manufacturers, including the Bangkok Iron and Steel Works, are experiencing significant losses and widespread layoffs. The closure of local factories, which predominantly utilize electric arc furnaces to produce steel bars and wire rods, has been exacerbated by competition from China’s prefabricated steel structures—exports of which skyrocketed from 400,000 tonnes in 2023 to 600,000 tonnes last year.
Given the state of the industry, there are urgent calls for government intervention to sustain the competitiveness of the Thai steel sector. Experts are advocating for a shift towards low-carbon manufacturing techniques to enhance export opportunities to Europe, particularly in light of the EU’s Carbon Border Adjustment Mechanism (CBAM), which imposes tariffs on high-carbon imports.
Bantoon Juicharern, chairman of the Federation of Thai Industries’ Steel Industry Club, has outlined seven strategic guidelines to mitigate the adverse effects of cheaper Chinese imports. These include prohibiting new steel factories that exceed local demand, promoting government procurement of domestically certified green steel, and accelerating the development of product standards for prefabricated steel structures. Additionally, reserving iron scrap for local production and incentivizing material reuse in construction is advised.
Other recommendations involve bolstering public-private partnerships using domestically produced materials and enhancing trade policies in response to evolving market dynamics. These measures aim to ensure the long-term viability and competitiveness of Thailand’s steel industry against an increasingly challenging landscape.
The Thai steel industry is grappling with extensive challenges due to the significant surge in cheap Chinese steel imports, leading to factory closures and job losses. Industry leaders emphasize the necessity for government action to preserve domestic manufacturing. Implementing strategic guidelines could enhance competitiveness, especially in light of global market pressures and environmental standards. Effective policy and collaboration among stakeholders will be essential for revitalizing the Thai steel sector.
Original Source: www.nationthailand.com
