Domestic steel consumption is expected to remain flat in 2023, with the threat of dumping of cheap steel in the Thai market possibly dealing a further blow to the country.
Steel demand in Thailand is projected to tally 16 million tonnes, similar to last year, as the government's infrastructure development projects are resuming slowly, while consumer purchasing power is weak and there is high household debt, said Chaichalerm Bunyanuwat, president of the EAF Long Product Steel Producers Association.
The tourism sector and the domestic economy are gradually recovering, causing people to be more cautious when spending money, said Mr Chaichalerm.
"We have yet to see positive factors that will increase steel consumption this year," he said.
However, Mr Chaichalerm said domestic steel sales might improve in the last quarter as consumers may start their new construction projects, while farmers tend to buy steel materials for their house or farm repairs during this period.
The association believes it will take time for the Srettha Thavisin government to push ahead with infrastructure development projects as it has only just started working.
Mr Chaichalerm called on the new government to launch new measures to prevent the dumping of cheap steel imports in Thailand especially after the EU enforces the Carbon Border Adjustment Mechanism (CBAM) in its transitional period from Oct 1.
CBAM is a tariff on products which release a high level of carbon dioxide during the manufacturing process.
The transitional phase of CBAM requires importers of iron and steel, aluminium, cement, fertiliser, electricity and hydrogen to report greenhouse gas emissions embedded in their imports to the EU without being subject to financial payments or adjustments.
Importers are scheduled to pay a levy for CBAM certificates from Jan 1, 2026.
China and Vietnam may export more steel to Asean countries, following sluggish steel consumption in their own nations.
"Local steel makers are worried that cheap steel imports will be dumped in the Thai market and their manufacturing may not meet global standards," said Mr Chaichalerm, adding that their production may emit high amounts of carbon dioxide.
This can affect Thailand's production and export of some products, especially cars, electronic products and home appliances, which use steel as raw materials.