FTI anticipates steel bump

Domestic steel consumption is estimated to grow 5-8% this year, supported by the government's infrastructure investment projects, says the Iron and Steel Industry Club under the Federation of Thai Industries (FTI).

The club expects the government will support local steel producers through the Made in Thailand policy and the local content scheme to help the industry.

Nava Chantanasurakon, chairman of the Steel Industry Club, said government construction projects in the Eastern Economic Corridor (EEC), electric trains in Bangkok and other metropolitan areas as well as high-speed trains will benefit the steel industry.

Last year, Thailand consumed 17-18 million tonnes of steel.

The FTI has raised concerns about global steel price changes due to demand growing from China, boosted by the pandemic and seeing China to import various types of steel to support economic growth.

Pravit Horrungruang, chief executive of Millcon Steel (Millcon), said revenue is expected to rise this year and the company will profit despite the Thai economy being gutted by the pandemic.

Construction of high-speed rail projects will start this year, which will increase demand for high-quality steel products.

"Steel demand will be higher than last year as delayed construction projects will resume this year and we have seen indications of rising demand," he said.

Millcon expects demand for steel products this year to reach 3.5 million tonnes.

Prices in global markets are expected to rise after the pandemic delayed construction projects and disrupted ore production last year, resulting in higher raw material costs.

Exports and imports were affected and logistics were also disrupted last year. These factors will push up prices of steel products this year.

"The company has focused on producing high-quality products that deliver a fat margin. We expect our performance will continue to be positive," Mr Pravit said.

Millcon has an edge over other manufacturers as the company has a comprehensive integrated operation with steel rolling mills, furnaces and steel scrap recycling facilities, he said. Most local steel manufacturers have steel rolling factories only.

Millcon can also produce steel bars to meet the high expectations of large construction firms, affording a competitive advantage.

"The company has a strong financial position and plans to reduce debt by 3.8 billion baht this year," Mr Pravit said.