Over recent years, the Thai steel industry seems to have contrasted with the subsiding trend globally. This is a result of our domestic public and private sector construction boom. In the meantime, certain industries that require steel as their basic components, e.g., the automotive industry has prospered, too.
During 1H13, the Thai steel industry grew satisfactorily on domestic consumption and exports. Consumption of steel in 4M13 soared 22.6 percent YoY at 6,532 thousand metric tons (rising over 2012 growth of 9.0 percent). This was attributable to a rapid rise in automotive manufacturing. Likewise, shipments of steel also gained. Between January and April 2013, the total value of steel product exports rose to THB81.5 billion, jumping 61.9 percent, after achieving only marginal growth of 3.4 percent during the same period of 2012.
Domestic demand for steel should be boosted by surging construction of low- and high-rise residences, as well as public infrastructure. However, demand may shrink in 2H13 due to a high 2012 base, when it was driven by the terminated First-Car Buyer Program; delivery of vehicles to customers is supposed to be completed around this time. KResearch projects that steel consumption in 2013 may increase 3.75-7.50 percent YoY, representing 17,240-17,860 thousand metric tons of steel, though that growth is less than the 12.2 percent growth overall in 2012.
As for exports, steel and products should see brighter prospects over the remainder of 2013, since Australia has cancelled their anti-dumping investigation into Thai steel industry. Moreover, booming construction within ASEAN, particularly for infrastructure, will likely raise our export value. Given this expansion in our trade partners, KResearch is of the view that Thai shipments of steel and products in 2013 will grow 13-20 percent, totaling THB250-266 billion. Although this projection is lower than the 43.6 percent surge in 2012, it should be considered satisfactory growth.
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