Thai steel manufacturers are worried about an influx of cheap steel products from Russia into Thai and Asean markets, following sanctions on Moscow for its invasion of Ukraine.
As steel exports from Russia are banned by the European market, Russia is seeking new buyers and China made purchases.
As steel consumption in China fell, a large amount of steel products will be shipped from China to other countries, said Chaichalerm Bunyanuwat, president of the EAF Long Product Steel Producers Association.
If cheap steel products are dumped in the Thai market, domestic steel prices will plunge, said Mr Chaichalerm.
"Local steel makers are closely monitoring cheap steel exports from China. Vietnam may also dump products in Thailand," he said.
The association expects steel production in China to decrease by 0.3% from 1.02 billion tonnes in 2022, mainly because of weaker demand related to a slowdown in the property sector.
Chinese manufacturers are trying to maintain steel production growth this year and focus more on environmentally friendly manufacturing.
China's steel exports are expected to tally 66.4 million tonnes this year, on par with last year.
Mr Chaichalerm said the Thai government should monitor the steel trade and find ways to help local producers.
He said projected steel output of 75.3 million tonnes from the Philippines, Indonesia, Malaysia and Vietnam should protect the Asean market from an influx of cheap steel products from China and Russia.
In 2022, Thailand's steel consumption decreased by 12% year-on-year to 16.3 million tonnes, down from 18.6 million tonnes in 2021.
Many projects have been launched to stimulate the domestic steel industry. According to the Iron and Steel Institute of Thailand, the Board of Investment approved 12 steel investment projects worth around 5 billion baht last year.
The government's infrastructure development projects in the Eastern Economic Corridor (EEC) as well as investments in the real estate sector are expected to increase steel usage in 2023. Authorities aim to turn the EEC into the country's high-tech industrial hub.