This report profiles Thailand’s steel industry, discussing market trends and outlook through 2014 and into 2015 and beyond. The report also highlights key leading players in the sector including Sahaviriya Steel Industries PCL, G Steel PCL and Tata Steel (Thailand) PCL.

Thailand’s steel industry was impacted by the global economic slowdown and sluggish business sentiment, causing the GDP y/y growth to decelerate to 0.7% in 2014 with likely recovery to 2.9% in 2015. Domestic steel sector saw lower levels of activity as a result of a delay in key investment projects and slow pace of government’s budget disbursement.

Local steel consumption contracted by 1.6% to 17.3mn tonnes in 2014, due to a contraction in most-steel consuming sectors, especially construction and automotive. Thailand, the top steel consuming country in ASEAN, expects growth of 5-6% in 2015, supported by recovery in public and private investment. The Iron and Steel Institute of Thailand (ISIT) estimates consumption to pick up pace as government initiatives start to trickle down and translate into real demand for steel.

Major challenges for the Thai steel market include the chronic oversupply and surging cheap imports from China, coupled with steep decline in steel prices, which have eroded margins of domestic steel players and forced some into insolvency. Going forward, more resilience in operating results is expected as sales volume and demand grow in line with economic recovery and government expenditure.

Key Points:

• Domestic apparent steel consumption accounts for the largest share (26%) among the ASEAN countries, although it registered a negative growth of 1.6% to 17.3mn tonnes in 2014.

• Domestic production of finished steel products increased slightly by 1.4% to 9.6mn tonnes in 2014.

• Consumption is largely served by imports rather than local production. Import of long products increased by 10%, while export declined by 2% in 2014.

• Apparent steel consumption in 2015 is estimated to grow by 5-6%, thanks to the positive contribution from economic stimulus as well as government spending and total investment.