Appetite for steel sturdy based on 18% growth
Steel consumption in Thailand the first eight months this year rose by 18.3% year-on-year to 13.1 million tonnes despite the Covid-19 impact, says the Federation of Thai Industries (FTI).
Demand from state infrastructure development projects fuelled the growth, though steel consumption from private investment projects and construction work declined, with the impact clearly seen from the end of June to the end of July, when construction workers’ camps were shut down to contain Covid-19 outbreaks.
Nava Chantanasurakon, chairman of the FTI’s Iron and Steel Industry Club, said the recovery of the automotive industry also benefitted the steel and iron industry.
“Car manufacturing and the ‘Madein-Thailand’ scheme helped increase steel consumption growth,” he said.
The scheme promotes the use of locally made products in state procurement projects to help local businesses, including small and mediumsized enterprises.
Demand for two types of steel — flat and long products — increased from January and August, according to the club.
Sales of flat products rose by 23.8% to 8,456,383 tonnes and sales of long products increased by 9.3% to 4,623,819 tonnes.
The capacity utilisation rate of steel manufacturing is 34.4%, meaning Thailand can expand production to serve local and global demand.
During the same period, steel exports from Thailand to other countries, notably the US and European nations, stood at 925,417 tonnes, an increase of 37.5% year-on-year.
“Exports of flat products increased by 36.6% to 387,155 tonnes, while exports of long products grew by 38.2% to 538,262 tonnes,” said Mr Nava.
The club projects steel consumption in Thailand to reach 16-18 million tonnes this year.
It believes global demand for steel will increase by 5.8% to 1.87 billion tonnes in 2021, then continue to climb by 2.7% in 2022.
Steel consumption in China is estimated to make up more than 50% of total global consumption, some 1.02 billion out of 1.874 billion total tonnes.
“As the global economy grows, steel consumption will increase,” he said.
The prospects for the global steel industry this year are different from last year, when global consumption, excluding China, decreased by 10%.
According to the club, steel consumption in China grew during the pandemic last year.