The government has pledged to talk with its Chinese counterparts about cutting its subsidies for steel production and exports to Thailand in an effort to strengthen Thailand’s steel industry.
Commerce Minister Chatchai Sarikulya said Thailand would propose the move at an Asean-China joint meeting July 28-30 in Brunei. It wants China to shave its subsidy for steel beyond what was agreed in the Asean-China Free Trade Area.
“Massive steel shipments by China cause trouble not only in Thailand but elsewhere in the world,” he said. “Thailand imported mass quantities of Chinese steel products the last few years.”
Last year Thailand imported 12 million tonnes of steel from China, up from 7 million the previous two years. For the first five months this year, Thailand already imported 5 million tonnes.
Thailand expects to use 18 million tonnes of steel products this year, mainly for cars, electricity and construction, up from 17 million last year. The country can produce only 8-10 million tonnes, so it relies on imports averaging 12.5 million tonnes from Japan, China and South Korea.
Gen Chatchai said customs authorities would be assigned to tighten steel
import inspections to curb cheap steel imports.
Last month the Commerce Ministry upgraded steel products, including steel bar, structural steel, hot-rolled steel plate, hot-rolled stainless steel and cold-rolled steel plate to the sensitive list from the priority watch list. This means the products are subject to daily price monitoring, a move that will curb local manufacturers from unfairly raising their prices.
The government feared its anti-dumping measures and safeguards against imported steel products the past few years to protect local manufacturers could result in a sharp rise in product prices at home. The measures led to higher tariffs for imported steel products, pushing leading steel product manufacturers to use more locally made products.
The ministry has 205 products under its supervision, with 27 on the sensitive list, consisting of mainly food, energy and consumer products.
Under sensitive list rules, local steel manufacturers, traders and distributors are required to inform the government of the daily prices for all types of steel products. The priority watch list only requires price updates twice weekly.
For the longer term, the government agreed to assign the Industry Ministry to set up a panel to handle the development of the western coast of the Gulf of Thailand and an upstream steel development committee to accelerate viability studies of upstream production or smelting plants in Thailand or neighbouring countries.
The Industry Ministry was also told to partner with the Board of Investment to prepare guidelines and an action plan for setting up upstream steel production in Thailand.