The Thai steel industry has lost more than 10 billion baht in revenue over the past 10 years, attributed mainly to an economic slowdown and the influx of cheap Chinese steel products into the Thai market, according to local steel manufacturers.
The decline in revenue was accompanied by a significant decrease in capacity utilisation in domestic steel manufacturing to below 30%.
If the situation escalates, many local steel factories may shut down or some may sell their factory licences to Chinese steelmakers in order to maintain employment, though this is illegal and raises concerns over production standards under new employers, according to the local steel manufacturers.
"We are facing many challenges, ranging from a drop in steel consumption to China's dumping of low-quality steel in Thailand," said Pravit Horungruang, an advisor of the EAF Long Product Steel Producers Association.
His group, together with nine other steel associations in Thailand, is calling on the government to better protect the local steel industry. They are also cooperating with Tata Steel (Thailand) Plc, a unit of India's largest manufacturer, to try to deal with the problem.
Authorities earlier launched measures in a bid to solve the problem, particularly through a move to prevent the establishment of new steel factories in the country for a period of five years in order to not raise the supply of steel in the country.
These measures are insufficient because steel products from China continue to flood Southeast Asia.
"Local steel manufacturers want the government to launch stronger new measures to save them," said Mr Pravit.
He used Malaysia as an example, which seriously protects its steel industry and promotes greater use of locally-produced steel in public-private partnership projects.
Thailand is currently the world's fifth largest steel importing country, purchasing over 10 million tonnes of steel from China per year, compared with 6 million tonnes per year produced domestically.
In 2024, total steel consumption in Thailand stood at around 15-16 million tonnes. The amount should not be much different this year, as it is projected to reach 16 million tonnes, driven by construction projects in the state and private sectors.
Theerayuth Lertsirarungsun, president of the Thai Wire Rod Association, also stressed the need for state assistance, following a drop in Thailand's wire rod production to 1.8-1.9 million tonnes a year, having once stood at 2.4 million tonnes a year, as a result of more Chinese low-cost wire rod being dumped in Thailand.
Wire rod is used in many industries, including car manufacturing, electronics and construction.