Chinese steel investments threaten Thai industry, warns FTI
The Federation of Thai Industries raises concerns over the potential domination of Thailand’s steel industry by Chinese companies, calls for regulatory action
The Thai steel industry is at risk of being dominated by Chinese companies setting up steel factories in the country, the Federation of Thai Industries (FTI) warned on Monday.
Kriengkrai Thiennukul, the federation’s chairman, said that the Thai steel industry’s capacity utilisation rate has dropped to its lowest in seven years, with the first six months of this year showing a rate of 29.3%, down from 31.2% in the same period last year.
He noted that the impact of Chinese investments, which are expected to boost production capacity to 12.42 million tonnes annually compared to Thailand’s demand of 16 million tonnes.
Notably, Xin Ke Yuan Steel Company, located in Rayong’s Ban Khai district, plans to boost its production capacity to 12.09 million tonnes, including wire rod, steel plate, coated steel, steel pipe and structural steel.
Similarly, Yongjin Metal Technology in Chonburi’s Nong Yai district is planning a stainless steel factory with a production capacity of 0.322 million tonnes per year, he said, adding that most of the projects have been approved by the Board of Investment.
Kriengkrai said these investments are in line with Beijing’s policy to reduce pollution in its own country and navigate trade barriers imposed by other countries.
“But once these steel factories are constructed, it will affect domestic manufacturers,” he warned, adding that the Thai steel industry’s capacity utilisation rate will potentially drop even further.
Despite this influx of Chinese investment, Kriengkrai assured that Thai manufacturers have enough production capacity to meet the country’s demand. He added that the Industry Ministry should introduce regulations to control the establishment of steel factories in Thailand.
He also raised concerns about the import of structural steel that does not meet Thai industrial standards, which could pose safety risks for consumers. He called for the introduction of stricter industrial standards to address this issue.
“Imports of structural steel is rising, especially from China,” he said. “In 2023, Thailand imported 426,340 tonnes of structural steel worth 21 billion baht, of which 92% came from China.”
Wanchai Phanomchai, secretary-general of the Thai Industrial Standards Institute (TISI), echoed these concerns, warning that the volume of products not meeting Thai industrial standards will likely rise. He identified steel and construction materials (37%), electrical and electronic appliances (33%), car tyres (25%) and consumer products (3%).
He urged government agencies to rigorously investigate these issues, emphasising the need for more officials and measurement tools to ensure compliance with Thai standards.
