Thailand’s apparent steel demand dropped sharply, by 14% y-o-y to 16.5 million tonnes in 2017. It is believed that the significant decline in demand in 2017 was largely due to destocking activity in the country.
Thailand’s steel demand picked up slightly, by 1.5% y-o-y to 8.48 million tonnes in the first half of 2018. This is in line with the growth rate of two major steel consuming sectors in the country, namely construction and automotive sector.
The National Economic and Social Development Board of Thailand reported that in the first half of 2018, construction sector grew 1.6%, compared with a 1.4% contraction in the same quarter last year. Krungsri Research reported in April 2018 that in the long run, public construction will see strong growth, due to the increased spending on mega-projects, especially the EED project.
According to the Thai Automotive Institute, vehicle production grew by 1.35% y-o-y in the first half of 2018. Although domestic sales declined 1.56% y-o-y, Thailand’s automotive sector still continue to grow, with export increasing 2.22% y-o-y in the same period of 2018. According to Krungsri Research, demand for new vehicles would increase by 0.4-0.5 million units during 2018 – 2020.
Thailand’s domestic steel production was stable, with output maintaining at 3.46 million tonnes in the first half of 2018. Total steel import increased 4.4% y-o-y to 5.8 million tonnes from January to June 2018. Export, on the other hand, increased 15.2% y-o-y to 778,120 tonnes in the same period.
Long steel demand declined 6.5% y-o-y to 2.66 million tonnes from January to June 2018. Domestic production dropped by a double digit of 10.9% y-o-y to 1.9 million tonnes in the same period. Long steel import increased 10.9% y-o-y to 1.2 million tonnes. This was the result of a significant increase in the import of both bar and wire rod, at 19% y-o-y and 15.3% y-o-y respectively.
Export of long steel increased 21% y-o-y to 423,466 tonnes in the first half of 2018. Thailand is a major section exporter in the region. Export of section, however, declined slightly, by 0.9% y-o-y to 150,911 tonnes. Meanwhile, export of bar and wire rod rose significantly to 132,804 tonnes and 14,293 tonnes in the same period respectively.
Flat steel production increased significantly, by 16% y-o-y to 1.6 million tonnes in the first six months of 2018. Import of flat steel surged 2.8% y-o-y to 4.6 million tonnes in the same period. The increase in import was mainly due to the moderate increase in both cold rolled coil and coated sheet while import of hot rolled flat steel dropped slightly.
Export of flat steel in Thailand hiked 8.9% y-o-y to 354,654 tonnes in the same period of 2018. Export of hot rolled flat steel was normally not significant. However, the volume increased from less than 10,000 tonnes in the first half of 2017 to nearly 50,000 tonnes in the same period of 2018. According to the Thai customs, the bulk of the export for plates in the first half of 2018 was to Vietnam while the main destination of the export of hot rolled coil was Malaysia.
Export of cold rolled coil surged moderately, by 6.3% y-o-y to 108,864 tonnes in the first half of 2018. Meanwhile, export of coated sheet dropped by a double digit at 23.2% y-o-y to less than 100,000 tonnes in the same period.