Tata Steel (Thailand) Plc (TSTH), a unit of India's largest steelmaker, remains worried as China continues to dump cheap steel exports in Southeast Asia, including Thailand, as the Chinese economy decelerates.
Steel products produced by TSTH. The influx of cheap steel imports from China into Thailand is still a serious concern among local steelmakers.
Thailand's imports of inexpensive steel from China rose by 18% year-on-year to 244,000 tonnes between January and February this year, said president and chief executive Tarun Kuma Daga.
"Last year, the influx of low-cost imports from China surged by 39% to 1.47 million tonnes, including wire rod and long steel products," he said.
Asean members Thailand, Indonesia and Vietnam have been severely affected by the import of cheap steel from China, said Mr Daga.
The downturn in China's real estate sector has reduced domestic steel consumption.
TSTH is also concerned about geopolitical conflicts, including those taking place in the Middle East and the war between Russia and Ukraine, which are likely to exert additional pressure on global crude oil prices, eventually affecting the operational costs in steel manufacturing plants.
The company is focusing on the export market and seeking new emerging markets to export its steel products, compensating for the domestic market which has not shown any improvement.
"The company continues to target export markets such as Canada, Australia, and Asean countries with high-quality products, including new offerings like low carbon and high carbon wire rods," said Mr Daga.
TSTH expects Thailand's steel consumption to improve in 2024, increasing from 16.3 million tonnes last year.
Mr Daga believes the government's investment projects and the spending of state budget, along with new construction projects from the private sector, will stimulate steel consumption in the country.
In the company's fiscal 2024, from April 2023 to March 2024, revenue decreased by 19.6% year-on-year to 24.7 billion baht, due to lower selling prices and reduced volume of wire rod exports. Profit before tax stood at 93 million baht, compared with last year's profit of 681 million baht.
During the same fiscal period, the company's steel sales decreased by 7.51% year-on-year to 1.12 million tonnes, which included domestic sales of 174,000 tonnes and exports totalling 139,000 tonnes.