Gargantuan Glut Grips Growth in Girders

Thailand’s steel industry is sinking under a vast oversupply, with capacity utilisation falling to just 28–30% as cheap Chinese imports flood the market. Between January and February, production of long steel dropped from approximately 7 million to 6 million metric tons over several years, while 75 factories have closed. In response, the Federation of Thai Industries has urged the Industry Ministry to stop new hot and cold rolled steel projects for at least five years to restore market balance and protect the sector.

Paroxysmal Prices Plummet Prompting Protective Pleas

Domestic hot rolled coil sells for around $699 per metric ton, lower than Singapore ($738) and Turkey ($740), though still more than China ($852). Meanwhile, global steel scrap costs have soared to $658 per metric ton, up 42%, contributing to higher production costs. With energy and wage inflation pushing input costs even higher, Thai mill operators fear further price erosion and eroding margins unless action is taken.

Cheapen Competition ‘Chokes Capacity’ Carefully

Cheap Chinese steel exports surged, 400,000 metric tons in 2023 to 600,000 metric tons in 2024,causing serious capacity overshoot and factory closures in ASEAN. Tata Steel Thailand reports an 8.7% year-on-year drop in long steel consumption to 2.47 million metric tons and overall consumption off by 6.9%, underscoring the domestic slowdown. Import data shows Thailand paid $3.57 billion to import iron and steel from China in 2024.

Tata Team Tactically Targets Trade Turmoil

Tata Steel Thailand, part of India’s Tata Steel group, has partnered with the Federation and other industry groups to lobby for government intervention. Chairman Tarun Kuma Daga cited capacity utilisation under 30% and called for enforcement of anti-dumping and safeguard measures to push back against Chinese imports. Their joint strategy includes regulatory appeals and promoting “green steel” certification to enhance export eligibility under Europe’s Carbon Border Adjustment Mechanism

Tariff Troubles Threaten Thai Trade

Adding pressure, Thailand faces mounting US tariffs: steel and aluminium duties have doubled to 50% during the Trump administration. Thailand, the 11th-largest aluminium exporter to the US with 65,204 metric tons sold last year, now confronts export headwinds . Exporters fear these tariffs could shrink market access and hamper competitiveness abroad.

Ministerial Moratorium May Mitigate Maladies

The Industry Ministry earlier extended a ban until 2030 on new steel bar and rod factories. Now, industry leaders urge expansion of this moratorium to include all rolled steel production. By halting new capacity, the government hopes to stabilise supply, rein in factory closures, and revive price levels. Policy makers see this as essential to preserving industrial confidence and steering future investments.

Renewed Reliance Requires Rationalised Roadmaps

Steel usage is dominated by construction (60%), automotive (30%), and other sectors (10%), where demand has softened . Hence, aligning capacity with demand is crucial. Advocates suggest stimulating infrastructure spending, like Eastern Economic Corridor projects, could prop up consumption. Concurrently, mandating green certification could help domestic mills win overseas contracts and meet CBAM requirements .

Export Equilibrium Envisioned Through Enhanced Enterprise

To counter lost US and EU markets, Thai producers are exploring ASEAN, Middle East, and African opportunities. However, substituting these markets requires time and cost competitiveness. Upskilling, energy efficiency, and lower carbon intensity are essential. Only then can Thailand reposition its mills as reliable, sustainable suppliers, even as global steel markets face volatility and trade tensions continue .

Key Takeaways:

Thai steel capacity utilisation sank to 28‑30%, with 75 factory closures and imports rising to $3.57 billion in 2024.

• Tata Steel Thailand and the FTI seek a five‑year moratorium on new hot and cold rolled steel facilities to stabilise prices and production.

• Rising input costs and doubled US tariffs to 50% threaten exports; local mills need green certification and trade measures to rebound.