Posted on 31 Jul 2024
The Thai market for long steel has weakened, Kallanish notes. Construction steel projects are slow to be implemented and stock overhang will mean that Thai steel buying appetite is depressed, Bangkok-based trading sources say.
Domestic prices have also been sliding. “The price of rebar has fallen by more than THB 1,000/tonne [$28/t] this month. Billet and scrap prices also dropped,” one trader notes. Users and stockists currently have 2-3 months' stocks when the usual is 1.5-2 months, a Bangkok trader observes. “They cannot buy anymore,” he notes. Last Friday, local rebar prices were prevailing at THB 18,400/t ($511/t) delivered to stockists/end-users.
Thai steel sales were sluggish during the first five months of this year on lower construction project spending and amid pressure from cheap steel imports from China, president and chief executive of Tata Steel (Thailand), Tarun Kuma Daga, is quoted as saying in the Bangkok Post. Consumption of finished steel products fell by 8.7% year-on-year to 2.47 million tonnes and overall steel consumption by 6.9% during January-May.
Tata Steel (Thailand) expects total steel consumption in 2024 to remain flat from 2023 at 16.3mt, mainly due to a delay in the government's budget allocation for fiscal 2024 and a slowdown in the construction sector. As budget spending approval was granted in March, he expects a pick-up in government construction and infrastructure projects in the third quarter.
He notes that Chinese steel exports to ASEAN during January-May rose by 20.3% year-on-year to 45.5mt. Imports of Chinese wire rod rose by 10% to 566,000t. Last year, Thai imports of Chinese wire rod rose by 9% y-o-y to 1.22mt.
Chinese suppliers have been directly exporting steel to Thailand or indirectly to Thailand via re-export from neighbouring countries, Daga says. However, he notes the steel export sector “is still healthy”. Tata Steel (Thailand) is focusing on exports particularly to new emerging markets to compensate for the drop in its domestic sales.
Thailand's steel production rebounded in May, while steel consumption inched higher, with both steel imports and exports showing a downward trend in the period.
Source:Kallanish
