Crisis in Thailand’s Steel Industry Due to Cheap Chinese Imports

Thailand’s steel industry is facing a crisis due to the rise of cheap Chinese imports, resulting in the shutdown of 71 factories this year and mass layoffs. Stakeholders are calling for government action to improve industry competitiveness and promote low-carbon manufacturing. Bantoon Juicharern has proposed seven guidelines to address these challenges and foster sustainable development within the sector.

Thailand’s steel industry is currently suffering significantly due to an influx of inexpensive Chinese steel, which has resulted in the closure of 71 factories this year, as reported by Krungthep Turakij. The surge in Chinese exports, which amounted to 110 million tonnes in 2024 primarily directed towards Thailand and other ASEAN countries, has caused severe financial losses and layoffs amongst major local manufacturers such as Bangkok Iron and Steel Works.

The dominance of imported Chinese steel is compounded by local Chinese factories operating in Thailand, which employ induction furnace technology, previously banned in China for its environmental implications. In contrast, Thai steel factories utilize electric arc furnaces, leading to higher production costs. Reports indicate that Chinese prefabricated steel structures imported into Thailand rose significantly from 400,000 to 600,000 tonnes within a single year, further exacerbating the challenges faced by local firms.

The factory closures have prompted stakeholders to demand swift government intervention to enhance the competitiveness of the Thai steel industry. In addition, industry leaders advocate for promoting low-carbon practices, especially considering the European market’s Carbon Border Adjustment Mechanism (CBAM), which makes eco-friendly production a necessity for competitiveness in international trade. This shift includes the need for support in renewable energy initiatives to lower production costs.

Bantoon Juicharern, the chairman of the Federation of Thai Industries’ Steel Industry Club, has outlined seven key proposals aimed at mitigating the adverse effects of Chinese steel imports in Thailand. These include banning the establishment of excess production capacity in steel factories, promoting procurement of domestically produced, environmentally certified steel, and expediting the standardization of industrial products concerning prefabricated steel structures. Other recommendations involve reserving iron scrap for local production, encouraging materials reuse from vehicles, increasing the usage of domestic products in publicly funded projects, and strengthening trade measures to accommodate market shifts.

The Thai steel industry is under acute stress due to the surge of cheap imports from China, which has led to significant factory closures and job losses. The local industry is advocating for urgent governmental measures to remain competitive, emphasizing the need for promoting green production practices and adapting to international market demands. The seven guidelines proposed aim to address production capacity issues, enhance domestic procurement, and utilize resources more effectively, showcasing a comprehensive approach to safeguarding the future of Thailand’s steel sector.

Original Source: www.nationthailand.com