Thai steel industry under pressure from China’s imports

The 2023 general elections and the prolonged process of forming a coalition government have led to the postponement of the state budget planning for the fiscal year 2024, contributing to a decrease in the country's steel production. Tarun Kumar Daga, President, and CEO of TSTH, called on the government, expressing hope that "the government will expedite budget distribution with infrastructure projects to boost local steel demand."

Last year, Thailand witnessed a yearly decline of 9.1% in steel consumption. Daga emphasized that this issue has been exacerbated by increased imports from China, which have undermined the local steel market.

In the January-November period of the previous year, China reached a seven-year peak by globally exporting 85.2 million tons of steel, marking a 35.4% annual increase. According to TSTH records, the reduction in steel demand in the Thai market led to a decrease in capacity utilization from 33% in 2022 to 28% in 2023.

The company stated that competition is a natural market phenomenon and expressed no concern about Russia's interest in promoting steel products in Thailand. However, they called on the Thai government to ensure fair pricing for imported steel to protect local steel producers.

In the third quarter of the fiscal year 2024, covering the period from October to December of the previous year, TSTH experienced a 12% year-on-year decline in sales, dropping to 253,000 tons. This decline resulted from a decrease in domestic steel demand and a fall in exports. During this period, the company's revenue decreased by 20.4% annually, reaching 5.4 billion baht (approximately 152,029,164 USD), leading to a recorded loss of 96 million baht (approximately 2,702,740 USD).

From April to December 2023, the company's sales declined by 11% annually, reaching 800,000 tons, primarily due to a decrease in demand both in Thailand and abroad, coupled with the impact of low-cost steel imports. During this period, the company's revenue plummeted by 24%, reaching 17.7 billion baht (approximately 498,317,817 USD), resulting in a substantial loss of 104 billion baht (approximately 2,927,927,912 USD).