Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Thailand’s leading steelmaker SIAM Yamato has decided to upgrade its EAF facility in Rayong, Thailand. The company will modernise its EAF no. 1 with the ConSo R6 injector technology to increase productivity and efficiency and make it maintenance-friendly and safer.


Earlier in 2010, the steelmaker had upgraded its EAF no. 2 with the same technology from the SMS group. The upgrade had improved the performance of the furnace’s coal injection and the new refractory lining reduced electricity, natural gas and oxygen consumption. 


Megaprojects to drive demand

Thailand’s steel manufacturers witnessing weak demand as the COVID-19 pandemic had severely reduced the purchasing power of domestic downstream industries in the first half of 2020. Mills resumed production amid recovering steel demand towards the end of Q2. Thailand’s industry is optimistic of steady steel demand from megaprojects in the Eastern Economic Corridor (EEC). The projects include a high-speed rail link connecting three key airports, the U-Tapao airport upgrade and the third-phase development of Map Ta Phut deep-sea port.


Local steelmakers have urged the government to support local industry through public-private partnership (PPP) contracts for these infrastructure projects. Thai Iron and Steel Industry Club under the Federation of Thai Industries (FTI) reported that around 60pc of the country’s steel output is consumed by the construction sector, while the remaining 40pc by car, machinery and home appliance manufacturers in Thailand. Post-COVID-19 outbreak, most construction projects have resumed. Car manufacturers have also resumed operations and a demand recovery from the auto sector is likely in Q4.


Anti-dumping safeguard 

Steelmakers are calling for anti-dumping protection against steel imports, especially from China. Thailand’s domestic manufacturers are prone to low-priced imports from overseas markets. 


Tata Steel Thailand (TSTH) said the automotive sector was operating at around 47pc of total capacity in July while the machinery equipment industry is hit by a change in customer behaviour, with companies focusing on capital conservation. It expects steel consumption in ASEAN to rise by 5pc in 2021 to 83.2mn mt driven by demand growth in Vietnam and Malaysia.


In 2020, Thailand’s steel consumption is projected to decline by 16.7mn mt from 18.6mn mt from the prior year according to the Millcon Steel Plc. During January-July, steel consumption dropped by 13.3pc from 11mn mt to 9.6mn mt a year prior.


During January-July 2020, steel production decreased by 12.9pc to 4mn mt from the prior-year period. Local steelmakers were facing tough competition, mainly from cheaper imports from China, South Korea, and Vietnam.



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