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Thailand: Steelmakers plan to raise prices amid surging costs
Thai steel manufacturers are planning to increase their domestic prices following a rise in operational costs, from raw material prices and electricity bills to the higher daily minimum wage.
The fuel tariff increase has caused steel producers’ power bills to rise by about 50%, said Pravit Horrungruang, adviser to the EAF Long Product Steel Producers Association.
“Many companies want to increase the prices of their steel products in accordance with the higher costs of raw materials, energy, logistics and wages in order to remain competitive or survive in business,” he said.
Countries such as Turkey have recently announced an increase in steel prices of US$20-40 per tonne, the association said.
In Thailand, prices of steel products, especially steel bars which are used in construction, are regulated by the Ministry of Commerce.
According to the association, the price of steel rebars in Thailand currently stands at $699 per tonne, which is lower than $738 per tonne in Singapore, $740 per tonne in Turkey, and $852 per tonne in China.
“The construction sector should sign long-term purchase contracts with steelmakers to avoid a price swing,” said Mr Pravit.
The association said the price of steel scrap in the global market is around $658 per tonne this year, an increase of 42% from $464 per tonne in 2021.
“If energy cost is added to the price, it will increase to $700-800 per tonne,” said Mr Pravit.
Thailand’s capacity utilisation in steel manufacturing is currently lower than 30%.
Earlier this year, the Iron and Steel Institute of Thailand, under the Ministry of Industry, said it expected domestic steel consumption to grow by 3-4% to around 19.5 million tonnes in 2022.
Demand for steel products will mainly come from the government’s infrastructure development projects, including the Thai-Chinese high- speed rail system and initiatives related to the Eastern Economic Corridor scheme.
In addition, recovery of the construction sector is also expected to drive the demand.
Source: https://www.bangkokpost.com/business/2395658/steelmakers-plan-to-raise-prices-amid-surging-costs