Thailand’s long steel product trade association expects the country’s domestic steel consumption in 2020 to drop by about 10-12pc or 2mn mt to 15-16mn mt from the prior year. The major reason cited is slowdown of economic activity amid COVID-19 outbreak.
Thai government’s infrastructure investment projects in the Eastern Economic Corridor (EEC) have been delayed. This will adversely impact the private construction industry. Business operators are waiting disbursement from the government. Thailand had announced THB523bn ($17.33bn) budget for the 2021 fiscal year starting on Oct 1.
Major steel manufacturers in Thailand are struggling with cash crunch while end-consumers are reluctant to spend on construction materials and equipment for new construction projects.
Thailand’s domestic steel sales is generally high during November to April period, however, lower confidence in the economic outlook has kept consumers from spending.
Thailand’s auto manufacturers, who are major consumer of domestic finish steel and speciality steel parts, fear a 30pc shrinkage in purchasing power. Automotive sector along with agriculture machinery consume 40pc or 7.6mn mt of steel produced in Thailand.
According to the World Steel Association, Thailand produced 365,000mn mt of crude steel in Jan 2020, up by 7.3pc from 340,000mn mt in Jan 2019. Imports of steel semis was the highest among all steel commodities in 2019.
In 2019, Thailand imported of 4mn mt semi-finished steel, up by 27pc from 3.17mn mt in 2018, according Davis Index analysis. Thailand exported 355,205mt of ferrous scrap in 2019, down from 407,901mt in the prior year.