Steel demand bodes well for Thai producers
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The Thai steel market is expected to experience consistent growth due to rising Asean demand, with prospects at home particularly bright thanks in large part to the government's Bt2-trillion project for transport infrastructure, according to experts.
Speaking recently at a “2013 SEAISI Conference & Exhibition” seminar on “Developing a Competitive Steel Industry in Asean”, held by the Southeast Asia Iron & Steel Institute and the Iron and Steel Institute of Thailand, Industry Ministry permanent secretary Vitoon Simachokdee said the Kingdom could witness an expanding steel market, given demand from industries such as the automotive, construction and machinery sectors.
The transport infrastructure project could also drive the Thai steel industry in the next seven years, he said.
Win Viriyaprapaikit, group chief executive officer and president of Sahaviriya Steel Industries, said there would be more room for growth in the steel markets of Asean, given early development steps towards industrialisation.
“Asean’s steel consumption remains at about 90 kilograms per person per year. This is very low when compared with industrialised countries, where consumption is in the range of 200-500kg per person per year,” he said.
Steel demand usually runs in line with per capita gross domestic product. Asean’s GDP per capita is expected to grow from US$3,700 (Bt114,560) in 2010 to $13,000 by 2030, he said, adding that such a rise could result in demand for steel nearly tripling to 262kg per person per year.
Demand from Asean countries, particularly Thailand, Malaysia, Vietnam and Indonesia, is projected to rise from 49 million tonnes in 2010 to 194 million tonnes in 2030, Win said.
However, despite Asean steel markets’ bright prospects, they currently rely heavily on steel imported from other countries, particularly Japan, South Korea and China. Last year, Asean steel consumption totalled 56 million tonnes.“The challenges for Asean steel producers are sustainable sources of raw materials, raw-material price volatility and uncertain delivery periods. Sahaviriya Steel focuses on sustainable sources of raw materials and downstream product development.
“In Asean, there should be more collaboration, such as the joint purchase of iron ore for higher bargaining power. And this requires the SEAISI to play more of a role to achieve such collaboration,” Win said.
