The Thai steel industry is facing significant challenges, primarily due to the influx of cheap Chinese steel products, which has led to a sharp decline in domestic capacity utilization. The Federation of Thai Industries (FTI) reported that capacity utilization dropped to 28% in 2023, a record low, with projections indicating a further contraction in demand before any potential recovery in 2025.

FTI Chairman Kriengkrai Thiennukul emphasized the need for regulatory measures to combat the dominance of Chinese steel imports, which are expected to undermine local manufacturers. In 2023, Thailand imported over 11 million tonnes of finished steel, marking a 4% increase from the previous year, while exports saw a slight decline.

Rising production costs, including electricity and raw materials, coupled with a sluggish economic recovery, have exacerbated the situation. Analysts predict that if current trends continue, the Thai steel sector could face severe operational challenges, including potential closures and job losses, unless government intervention is implemented promptly to protect local industries.