This report profiles Thailand’s steel industry, discussing market trends and outlook through 2013 and into 2014 and beyond. The report also highlights key leading players in the sector including Sahaviriya Steel Industries PCL, G Steel PCL and Tata Steel (Thailand) PCL.

Thailand’s steel industry was impacted by both the global economic uncertainty and domestic political crisis, causing the GDP y/y growth to decelerate to 2.9% in 2013 and likely drop further to 1-1.5% in 2014. Domestic steel sector saw lower levels of activity as a result of a delay in key investment projects and slow pace of government’s budget disbursement.

Local steel consumption registered a growth of 7.5% to 17.6mn tonnes in 2013, thanks to construction sector growth, although a lower figure when compared to double digit growth of 12.5% in 2012. The increase in consumption was served by a big increase of imports. The Iron and Steel Institute of Thailand (ISIT) estimates the 2014 steel consumption to grow by only 1.2-3.6% due to slower-than-expected recovery in exports and investment. However, with the functioning of a new government post-political disturbances, overall business sentiment is improving while consumption slowly picking up. The growth in steel demand will largely depend on the development of infrastructure and growth in construction sector.

Many domestic steel companies were negatively affected by the sluggish economy and surging cheap Chinese imports, which led to falling prices and profit margins in the first half of 2014. Going forward, more resilience in operating results is expected as selling price and sale volume increases.

Key Points:

• Domestic apparent steel consumption grew by 7.5% to 17.6mn tonnes in 2013, accounting for the largest share (28%) among the ASEAN countries.

• Domestic production of finished steel products increased 3.2% to 9.48mn tonnes in 2013.

• Consumption is largely served by imports rather than local production. Import of long products surged by 18%, while long steel production contracted 2% in 2013.

• Apparent steel consumption in 2014 is estimated to grow by only 1.2-3.6% due to the delay of public investment projects and the lower-than-target budget disbursement rate.