Tata Steel Thailand (TSTH) is shifting its focus towards local market steel demand instead of export due to infrastructure investments in the country. The company is focusing on steel demand from the Thai-Sino high-speed train project and state-sponsored infrastructure projects, including road construction. The train project is expected to require 500,000-600,000mt of steel.
Thailand’s steel consumption was 16.5mn mt in 2020 and given the positive signs that will drive steel demand, a higher steel consumption of 18-18.5mn mt is expected in 2021. That would entail an increase of 9-12pc year-over-year. Demand for steel grew by 6pc in January and February from the same period a year ago. A domestic focus also minimizes the potential risk in export markets on varying lockdown levels in place, and that may be put in place on uncertain COVID-19 developments.
TSTH plans to invest THB250-300mn ($8-9.6mn)during FY22 ending March 2022 to improve production efficiency and steel quality.
TSTH presently has 1.7mn mt of annual steelmaking capacity and does not have plans for capacity expansion. TSTH expects to sell 1.3mn mt or more in FY22.
($1=THB31.37)