News Room - Steel Industry

Posted on 25 Apr 2008

Steelmaker upbeat about local market

Demand projected to pick up after slump

Even though the three-month-old government led by Samak Sundaravej has not yet achieved concrete results from its many efforts to boost the economy, Australian-based BlueScope Steel (Thailand) remains confident it will help resume growth of cold-rolled consumption. Gregory Moffitt, vice-president for marketing of BlueScope Steel (Thailand) Ltd, saw the recovery of overall business confidence following the Dec 23 election as a factor that would help increase steel consumption here.

Foreign direct investment in Thailand, as reported by the Board of Investment, also showed a big increase of 75% in 2007 and should help boost demand for steel in the country, he said.

The government's massive spending on megaprojects to improve the public transport network, as well as the construction of Airport Link to Suvarnabhumi would also spur steel consumption, added Mr Moffitt.

Thailand uses 12-13 million tonnes per year of all steel types.

Voraphol Angsulapivat, the company's vice-president for sales, said the steel market over the last few years had seen flat growth due mainly to the political turmoil.

''This year, politics have showed some degree of improvement, prompting us to believe that the steel demand would pick up,'' said Mr Voraphol.

''We expect the growth rate to at least be on par with the country's gross domestic product (GDP) this year.''

Thailand's consumption of cold-rolled steel, mainly used in the automotive industry, is forecast at around two million tonnes this year, 400,000 to 500,000 tonnes of which are imports, according to the Iron and Steel Institute of Thailand.

Its price has surged by $200 per tonne this month to about $1,000 to reflect the rising costs of raw materials including hot-rolled steel, said the institute.

Mike Gundy, president of BlueScope Steel (Thailand), said the prices of cold-rolled steel had been adjusted on a monthly basis due to soaring raw-material costs in line with oil prices.

Coking coal prices have surged by 300% over the last 12 months while the price of iron ore doubled and freight charges increased, said Mr Gundy.

BlueScope Steel's factory in Map Ta Phut, Rayong, currently sells more than half of its annual output of 400,000 tonnes of coated steel products in the domestic market with the rest exported.

The company's main export markets are India, Vietnam, Malaysia, Indonesia, Africa and Europe, according to Mr Gundy.

With a three-billion-baht investment, the doubling of the Map Ta Phut plant's capacity was completed in late 2006, turning it into BlueScope Steel's largest facility in Southeast Asia.

The factory operates in tandem with BlueScope's sister plants in Malaysia and Indonesia. The parent company recently operated the new metallic coating plants in Vietnam and China while another one in India will begin operation in two years.

BlueScope Steel (Thailand) sold 176,000 tonnes in the second half of last year both for domestic and export markets.