Global steel prices, which soared as a result of the Russia-Ukraine war, have declined following lower demand for steel in China and an increase in steel imports into Asia from Russia, says the Federation of Thai Industries (FTI).
Price fluctuations have eased since June, with steel prices in the Asian market falling by 3.2-4.9% in June and further declining by 5.2-16.3% in July, said Nava Chantanasurakon, chairman of the FTI's Thailand Iron and Steel Industry club.
The decrease was attributed to China's zero-Covid policy, which led to the enforcement of lockdown measures in cities where infections were reported.
This slowed down demand for steel in China, which declined by 6.9% to 501 million tonnes in the first half of this year, said Mr Nava.
Its steel product exports stood at 34.2 million tonnes in the same period. Most of them were sold at low prices.
The other key factor has been an increase in the export of steel products from Russia to Asia, with Russia unable to sell to Europe in the wake of Western sanctions, said Mr Nava.
In Thailand, demand for steel products also fell by 13% year-on-year to 8.78 million tonnes in the first six months of 2022, mainly due to an investment slowdown in the construction sector and challenging economic conditions.
These factors resulted in "very low" capacity utilisation in domestic steel manufacturing, which stood at 33.3% amid higher prices for energy and raw materials, said Mr Nava.
"We expect global demand for steel to decrease this year because of the global economic slowdown, high inflation, Covid-19 outbreaks and the ongoing Russia-Ukraine war," he said.
Mr Nava urged the government to keep an eye on steel dumping in the Thai market and seriously enforce anti-dumping measures.
He added that Thailand needs to stay alert to any suspected dumping as the country is not far geographically from China and India, the world's largest and second largest steel producers, respectively, with a combined production capacity of 1.2 billion tonnes a year, making up 62% of global steel manufacturing.
