Thai Steel Industry Faces Crisis Amid Rising Chinese Imports
The Thai steel industry confronts a crisis as cheap Chinese imports lead to 71 factory closures in 2024. Domestic producers are struggling with losses and layoffs. Urgent government intervention is needed to ensure competitiveness, including support for eco-friendly practices and promotion of local steel products. Bantoon Juicharern proposed seven guidelines to mitigate the impact.
The Thai steel industry is currently in turmoil due to a significant influx of inexpensive Chinese steel, resulting in the closure of 71 factories as reported by Krungthep Turakij. Chinese steel production in Thailand is expanding, putting immense pressure on local manufacturers. In 2024, China exported 110 million tonnes of steel, primarily to Thailand and surrounding ASEAN nations, leading to substantial losses and job reductions at major companies such as Bangkok Iron and Steel Works.
Factories closed this year predominantly utilized electric arc furnaces, which are costlier compared to the induction furnaces employed by Chinese manufacturers, who have been allowed to operate despite earlier bans due to environmental concerns. The competitive landscape diminished for Thai producers as China’s prefabricated steel structure exports rose dramatically from 400,000 tonnes in 2023 to 600,000 tonnes in 2024.
The factory shutdowns have ignited appeals for prompt government intervention to enhance the long-term viability of the Thai steel sector. There is a pressing need for governmental support for eco-friendly manufacturing to enhance export opportunities, particularly to Europe, where policies like the Carbon Border Adjustment Mechanism (CBAM) impose tariffs on high-carbon imports. Therefore, promoting affordable renewable energy is crucial.
Bantoon Juicharern, the chairman of the Federation of Thai Industries’ Steel Industry Club, has put forth seven recommendations aimed at mitigating the adverse effects of Chinese steel imports:
1. Prohibit the establishment and expansion of steel factories with production capacities that surpass Thai demand.
2. Encourage government procurement of steel from factories with Green Industry certification at level 4 or higher.
3. Accelerate the creation of standards for industrial products, particularly prefabricated steel structures.
4. Implement policies ensuring the availability of iron scrap for domestic production.
5. Encourage the recycling of materials from decommissioned vehicles.
6. Advocate for the use of domestically produced products in public-private partnerships and incentivized construction projects.
7. Strengthen trade measures to remain responsive to market dynamics.
In summary, the Thai steel industry faces significant challenges due to a surge in cheap Chinese imports, resulting in numerous factory closures and financial losses. There is an urgent call for government action to enhance the competitiveness and sustainability of local producers. Adopting eco-friendly practices and promoting domestic procurement are crucial strategies suggested by industry leaders to navigate this crisis effectively.
Original Source: www.nationthailand.com
