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Tel : 0086-0371-86172891
According to news reports from the Thai Steel SA517 Grade S steel Association, the Thai steel industry has been continuously impacted by Chinese steel companies entering the ASEAN market over the past 10 years, resulting in a continuous reduction in local production scale. The capacity utilization rate in 2024 is only 29%. Thailand's crude steel production will reach 4.92 million tons and finished steel consumption will reach 16.29 million tons in 2024.
As of February 19, 2025, Thailand has announced the closure of a total of 71 steel factories. For example, major steel producer Bangkok SA517 Grade S steel Steel Works Co., Ltd. announced layoffs due to sustained losses in 2023. Furthermore, as of the end of 2024, Millcon Burapha Limited has not yet resumed operations.
According to sources related to the steel industry, analyzing the business strategies of Chinese steel companies in Thailand, it can be found that they adopt the following four methods:
1. Acquisition of shares in Thai Steel Company: By acquiring shares in Thai Steel Company, the Thai shareholders will be changed to Chinese shareholders, while retaining the original company name and employees for production and export. Chinese companies usually target steel plants with a certain production history but facing financial problems, and then partially reduce the production capacity of Thai factories, turning to importing steel products from China for sales. Some companies will gradually introduce induction furnace technology (IF) into their production systems, which significantly reduces manufacturing costs, but there are environmental controversies.
2. Utilize the advantages of free trade zones: Import steel products through free trade zones, store and repackage them for export to third countries, and take advantage of Thailand's origin advantages to avoid tariffs, etc.
3. Avoiding anti-dumping duties: Chinese steel importers adjust the tariff codes of steel products to avoid anti-dumping duties imposed by the Thai Ministry of Commerce. For example, adjusting the alloy composition of hot-rolled steel plates to change tariff classification and avoid high tariffs. This type of method is particularly common in H-beams and I-beams.
4. Imported prefabricated structural steel: Prefabricated structural steel is a product that has not yet been subject to anti-dumping duties or investigations, and it is also a product for which the Thai Institute of Industrial Standards (TISI) has not yet established mandatory standards. It is reported that the import volume of prefabricated structural steel will continue to increase in 2024, reaching 600000 tons, higher than the 400000 tons in 2023.
Therefore, driven by various factors, Thailand, as one of the countries with the highest demand in the ASEAN region (second only to Vietnam), has become the main target for China's steel industry to invest abroad. And Thailand has not restricted the construction of new steel mills, while Malaysia has begun implementing measures to prohibit the construction of new steel mills, which has led to more Chinese SA517 Grade S steel investment flowing to Thailand.
