Thailand’s Prime Minister (PM) Prayut Chan-o-cha has declared a state of emergency after the number of new COVID-19 cases surged to 984 in the country. The act invoked under the royal decree on emergencies, came into effect from March 25 imposing tougher restrictions on movement and large gatherings. These restrictions will be effective until April 30.

 

The decree bars travel to Thailand via land, sea and air, with a few exceptions such as goods transportation, diplomatic missions and foreigners with work permits. However, domestic establishments providing essential goods and services including banks, factories, markets, financial institutions, gas stations, and online delivery services will continue to operate. 

 

Since the outbreak, around 60,000 migrant workers from Laos, Cambodia, and Myanmar returned home till Tuesday. But the extent of disruption in various businesses is unclear. 

 

The decision is likely to have repercussions on the Thai steel industry. According to Davis Index sources, East Asian traders are cancelling their ferrous scrap contracts as buyers have asked them to halt loading. Thailand’s domestic ferrous scrap prices also dropped by over $20-25/mt in a week, on the back of the COVID-19 pandemic.

 

The Thai Iron and Steel Industry Club estimates that domestic steel consumption in 2020 will decrease by 11-12pc to 15-16mn mt from 17-18mn mt in 2019. The country’s automotive sector, including the agriculture machinery, is expected to consume 40pc or 7.6mn mt of total production capacity. Although, with General Motors selling their factory to China-based Great Wall Motors, a few market participants are concerned that the entity is likely to use imported steel. 

 

Exporters in a limbo

Some aspects of rail and roadway services remain suspended and orders do not contain specific mention of seaport operations. Major commercial activities, including seaports, airports, and steel mills are likely to remain open in Thailand. A lack of policy clarity has national buyers and international sellers in limbo.

 

Bangkok was plagued by protests amid severe air quality concerns recently. Unlike other Asian countries, Bangkok has activated the state of emergency to manage protests multiple times since 2008.

 

Transportation woes in other Asian markets  

Countries like India, Pakistan, and Malaysia have also instituted drastic lockdown measures. In Pakistan, PM Imran Khan stated the country could lift the ban on transportation to ensure supply of essential items in the country. In India, transportation is banned barring the vehicles used in emergency services. In some Indian cities, citizens working to keep essential services running must seek special police permission to use their vehicles. 

 

In the three countries, ports are open for loading and unloading, but transportation to buyers’ site may be limited or unavailable. Businesses, including manufacturing, remains shut with most workers on home quarantine. Additionally, buyers are unable to process necessary customs documents and payments. 

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