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20 May 2009

Industry

New Markets: Way to Survival for Thai Steel Industry in 2009 (Business Brief No.2509)

คะแนนเฉลี่ย
The World Steel Association has recently forecast that global steel consumption will shrink 14.9 percent in 2009. That contraction was quite obvious during 1H09, due to heightened competition in the market. Protectionism is rising, with several countries taking steps to guard their domestic steel industries. Thai steel product exports will thus inevitably falter with the global slump in demand and proliferation in trade barriers. KASIKORN RESEARCH CENTER (KResearch) has analyzed the likely adverse consequences for Thai steel exporters from greater rivalry in the international steel market in 2009.
Amid excessive steel supply, steel exporting countries and exporters will likely focus on pricing strategies to boost their sales turnovers. Recently, the Chinese government raised export rebates on several steel products to assist local steel exporters. In addition, Russia, Ukraine and South Korea – among the world's large steel exporting countries – recently cut their steel prices in order to increase exports. As a result, several countries have adopted protectionist policies to save their own steel industries. Vietnam has decided to raise import duties on steel imports from non-ASEAN countries; India has imposed anti-dumping (AD) tariffs on cold-rolled stainless steel imported from 14 countries, including Thailand, for a period of six months, and New Zealand may renew their AD tariffs on imports of reinforced steel bars (;rebar”) in 5-40 mm. thicknesses from Thailand. All these steps indicate that the international steel market will see heightened competition for some time.
Even so, bright opportunities seem to lie ahead for Thailand's steel exports, especially iron and steel products such as structural steel that has recorded healthy growth. Our exports of steel pipes have also been trending upward, albeit moderately, particularly shipments to developing countries in the Middle East, Eastern Europe, Africa and Asia. Focus thus should be on these markets to take advantage of growth in their construction industries.

Among other positive factors for Thai steel exports include rising demand as a result of infrastructure investments by the governments of many countries to stimulate their economies, plus the benefits Thailand may get from Vietnam's increase in tariffs on steel imports from non-ASEAN countries. Nonetheless, close attention should be paid to stiffer trade barriers, especially the protectionist measures adopted by India, and dwindling global demand for steel amid the economic recession.

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