Thai Steel Industry Faces Crisis Amidst Rising Chinese Steel Imports

The Thai steel industry is collapsing under cheap Chinese imports, leading to 71 factory closures in 2023. Chinese steel exports have surged, causing job losses and prompting calls for government action. Industry leaders propose measures to enhance competitiveness and promote sustainable practices in domestic steel production.

The Thai steel industry is facing significant challenges due to a surge in cheap Chinese imports, resulting in the closure of 71 factories this year alone, according to Krungthep Turakij. The industry struggles to compete as Chinese manufacturers increase their steel production within Thailand, worsening the situation for local producers.

In 2024, Chinese steelmakers exported 110 million tonnes of steel, primarily to Thailand and other ASEAN nations. This influx of inexpensive steel has caused ongoing financial losses and widespread layoffs at prominent Thai manufacturers, such as the Bangkok Iron and Steel Works, as they grapple with reduced market competitiveness.

Chinese steel manufacturers have been permitted to establish operations in Thailand using induction furnaces, a method banned in China since 2017 due to environmental concerns. Conversely, the affected Thai factories utilize electric arc furnaces, which incur higher production costs, further complicating their competitive stance.

Industry reports indicate that Thai steel production is adversely impacted by a rise in Chinese exports of prefabricated steel structures, which increased from 400,000 tonnes in 2023 to 600,000 tonnes the following year. This trend underlines the urgent need for government intervention to sustain the local steel industry in the long term.

Industry stakeholders advocate for government support in promoting low-carbon manufacturing, especially in light of the Carbon Border Adjustment Mechanism (CBAM) in Europe, which imposes tariffs on high-carbon imports. This involves fostering affordable renewable energy sources and enhancing competitiveness in. Bantoon Juicharern, chairman of the Federation of Thai Industries’ Steel Industry Club, has outlined seven actionable guidelines to mitigate the challenges posed by Chinese steel imports.

In conclusion, the Thai steel industry is in a precarious position due to the influx of low-cost Chinese steel, leading to factory closures and significant job losses. Urgent government measures are needed to safeguard the industry’s future, including promoting sustainable practices and ensuring domestic producers remain competitive. The proposed guidelines by industry leaders provide a framework for action to address these critical issues and foster a resilient steel sector in Thailand.

Original Source: www.nationthailand.com