Thailand’s steel consumption is expected to decline by 6.9 percent on average in 2020, impacted by the pandemic, said Wirote Rotewatanachai, president of the Iron and Steel Institute of Thailand, during the SEAISI e-conference held last week. As the decline in steel demand will be much bigger than in 2018, it may impact import volumes of semi-finished products arriving in the country.
This projected decline of demand by 6.9 percent to about 17.3 million mt is an average of two scenarios – in the worst of them, demand will lose almost 10 percent. The steel demand drop will be much bigger than the 3.8 percent decline registered in 2019. In the first quarter this year, consumption went down by 1.3 percent year on year, but a bigger negative change is expected for the second quarter.
Weaker steel demand will hit the import market and the semis segment may be impacted the most, as it posted sharp increases in 2019. Overall steel imports to Thailand posted a 4.2 percent decline to 17.6 million mt in 2019, but semis shipments surged by 26.4 percent in the given year to 4 million mt. According to customs data, in the first five months of the current year, semis shipments to Thailand dropped by 15 percent year on year to 1.368 million mt.
As regards finished product imports, flat steel shipments to Thailand increased by 2.4 percent year on year to 9.36 percent in 2019, but, taking into account that automotive production already fell by 19.8 percent in the first quarter, a visible decline in flat steel imports is also expected for the whole of 2020.