SET-listed Tata Steel Thailand Plc, the local unit of India's largest steelmaker, is concerned that the risk of US measures imposing tariffs on steel and aluminium imports will increase prices for the raw materials of steel worldwide.
All upstream materials prices are expected to rise, such as iron ore, ferrous scrap, coking coal and graphite electrodes.
For example, the price of scrap metal services made from ferrous scrap is being monitored after rising to US$350 a tonne on the global market.
Rajiv Mangal, Tata Steel Thailand's chief executive, said steel producers in many countries are monitoring the effect of the US measures because they expect raw material prices to increase, affecting supply and demand for steel and aluminium worldwide.
"Tata forecasts the US will still have steel demand exceeding its supply, even with the tariffs," he said.
The US placed a 25% tariff on steel imports and 10% tariff on aluminium imports.
Moreover, Tata is concerned about China's steel exports being dumped in Southeast Asia because of the trade barrier.
China exports between 900,000 and 1 million tonnes of steel to the US a year.
Tata forecasts Thailand's steel demand in 2018 to grow by 5-8% to 17.5 million tonnes, thanks to the many megaprojects that should beef up private investment.
Mr Mangal expects Tata's sales volume to increase by 8-10% to 1.32-1.35 million tonnes in its fiscal 2019 starting in April, in line with local demand growth.
Last year Tata sold 1.22 million tonnes of its steel products. It targets steel exports to surge by 32% to 150,000 tonnes this fiscal year from 113,000 tonnes last year.
Tata reported revenue of 22.25 billion baht in fiscal 2018, which ended in March, with net profit of 455 million baht.
Mr Mangal said an expansion project with total investment of 75 million baht and capacity of 3,000 tonnes a month is scheduled to begin operations in June.