The Iron and Steel Institute of Thailand is calling on the Srettha Thavisin government to bolster the local steel industry, which plays a key role in helping build national security and reduces dependence on imports.
A recent vow by Mr Srettha, a real estate mogul turned politician, to reduce the cost of living for people and operating costs for businesses was welcomed by the institute’s senior director Somsak Leeswadtrakul, a steel tycoon and investor in various industries.
“We are delighted to hear the government plans to reduce diesel and electricity prices, which should help Thais and the steel industry,” said Mr Somsak, also an honorary chairman of G and GJ Steel Plc, the largest integrated steel mills in Thailand.
“We all hope the new prime minister will stimulate GDP growth through both domestic consumption and exports.”
Domestic steel consumption and imports are among the issues that need more attention from the new government because they can help strengthen the Thai economy, he said.
The steel business is considered the backbone of infrastructure in Thailand, said Mr Somsak. There are more than 200,000 employees working in the steel industry, with a total production capacity of 22 million tonnes a year and total investment worth around 500 billion baht.
However, the latest figures show steel consumption in Thailand totals 17 million tonnes a year, or 450 billion baht in value.
In Asean, Vietnam is ranked first in terms of steel consumption at more than 20 million tonnes a year, beating Thailand, which was once a champion in this region.
In the first quarter of this year, Thai steel production was only 3.3 million tonnes, while imports totalled 5.8 million tonnes.
“This is evidence that there is something wrong with our steel industry,” he said.
Mr Somsak said that domestic steel consumption and imports are among issues that need a greater care from the new government.
Unused production capacity was high, reaching 70%, while steel imports increased by 5.7% year-on-year.
Compared with other Asean countries, Thailand has the highest ratio of steel imports at 63%, while the others average 22%. This is considered a huge balance deficit, with imported steel products worth more than 200 billion baht a year, said Mr Somsak.
He said there is an influx of steel product imports amid a volatile global market, which has been affected by the slowdown of the real estate sector in China.
Mr Somsak urged the new government to enforce the Anti-Dumping and Anti-Circumvention Act efficiently to prevent companies from allegedly adding alloy to hot-rolled coil, aimed at avoiding the law against imported hot-rolled coil.
The law should support local steel manufacturers who use technologies from Japan and South Korea to improve their production, making it more environmentally friendly with low carbon dioxide emissions, he said.
The US is a good example of the promotion of locally made products, following the launch of its “Made in the USA” campaign, said Mr Somsak.
“We would like to see a sustainable steel industry in Thailand, which will prepare us for the new era of electric vehicles,” he said.
The EU is preparing to enforce the Carbon Border Adjustment Mechanism (CBAM) during a transitional period, starting from Oct 1 this year, in a move to protect against carbon-intensive imports.
The transitional phase of CBAM requires importers of iron and steel, aluminium, cement, fertiliser, electricity and hydrogen to report greenhouse gas emissions embedded in their imports without being subject to financial payments or adjustments, according to the EU.
Importers are scheduled to pay a levy for CBAM certificates from Jan 1, 2026.
