Tata Steel Collaborates with Thai Steel Industry to Combat Chinese Steel Dumping
Tata Steel Thailand, a subsidiary of India’s largest steelmaker, has joined forces with multiple steel manufacturers and industry associations to address the rising issue of Chinese steel dumping in the Thai market. This issue is becoming more urgent due to the decrease in domestic steel consumption in Thailand, pushing local steel producers into increasingly fierce competition in a sluggish market.
The Thai steel industry is facing mounting challenges as Chinese steel exports flood the market at lower prices, making it difficult for local manufacturers to compete. Tata Steel has initiated discussions with the Federation of Thai Industries' Steel Industry Club and 10 other steel associations to come up with joint strategies to tackle the influx of low-cost Chinese steel products.
Government Support Sought to Tackle Dumping
According to Tarun Kuma Daga, President and CEO of Tata Steel Thailand, the company is currently exploring various measures to address the issue and is planning to seek government support. Daga highlighted the growing concerns over declining local manufacturing, particularly with the capacity utilization of local steelmakers now falling to below 30%. This has been attributed to the sluggish domestic market and the inability of Thai steel producers to compete with the cheap imports from China.
The government is increasingly concerned about the weakening local steel industry, and the Federation of Thai Industries is urging the government to take action. The Joint Standing Committee on Commerce, Industry, and Banking has called for enforcement of existing laws, such as the 1999 Anti-Dumping Act and the 2007 Safeguard Measures, which were created to protect the Thai market against the surge in cheap Chinese imports.
Impact of Chinese Steel Exports on Thai Market
In 2024, China significantly increased its steel exports by 22.7%, reaching 111 million metric tons (mt), up from 90.3 million mt in 2023. This increase came after China relaxed its steel output reduction policies, which had been implemented earlier to combat oversupply and the environmental effects of steelmaking. The Steel Industry Club of Thailand remains cautiously optimistic, believing that steel exports from China may reduce as the country's steel demand is expected to rise in line with economic recovery.
In the first 11 months of 2024, Thailand's steel consumption declined by 1.2%, continuing a negative trend from 2023, when consumption dropped by 12%. This drop in demand, combined with the increase in Chinese steel exports, has placed additional pressure on local steel producers.
Outlook for Thailand's Steel Industry
Despite the challenges, Tata Steel is optimistic about the prospects for the Thai steel market in 2025. The company believes that steel consumption will rise, particularly due to the government's mega-infrastructure projects valued at 150 billion baht, which began in 2024. These projects, set to span over three years, are expected to require approximately 300,000 metric tons of steel.
From October to December 2024, Tata Steel Thailand reported sales of 277,000 metric tons, slightly down from 280,000 metric tons in the previous quarter. The decrease was attributed to lower domestic sales, though exports saw an increase. This highlights the continued importance of export markets for the company, as it navigates domestic challenges.
