Sahaviriya Steel points out that the Thai steel industry is in crisis. After the EU enforced CBAM measures and subsidies to help steel mills convert to using green energy to reduce carbon emissions, with many countries beginning to use similar measures to block trade. Plus, China dumped the market. Hopefully the private sector will work together to create a roadmap with the government and institutions helping to support both the procurement of green energy to transition to Green Steel.
Mr. Win Wiriyaprapaikit Group Chief Executive Officer of Sahaviriya Steel Industries Public Company Limited (SSI) spoke on the topic of The Future of Steel at the 25th anniversary event of the Iron and Steel Institute of Thailand that At present, the problem of climate change (Climate Change) is a serious problem and has led to various regulations that many countries will enforce to reduce greenhouse gas emissions. For example, the European Union has issued the CBAM (Carbon Border Adjustment Mechanism) measure. or cross-border carbon tax measures to be enforced during the transition period this October. To tax steel that emits high carbon in the production process. Protecting producers with lower carbon emissions within Europe is There is currently no clear standard for measuring carbon emissions. And it is believed that other countries have adopted measures similar to CBAM as well, making it difficult to export products abroad. Therefore, CBAM is no longer a distant matter.
At the same time, raw materials for steel production such as steel scraps circulate in the world market. 100 million tons will begin to be limited Because countries that are exporters of scrap such as the United States, EU, and Japan have turned to setting up their own steel smelting factories. And China has banned the export of scrap metal. This causes the Thai steel industry to have problems with raw materials in the future.
In addition, governments in many countries, including the United States and the EU, have provided subsidies to transform energy into clean energy. Make the industrial sector have clean energy to use in production. The government also provides subsidies to steel mills to change production technology to reduce carbon emissions. Including CBAM measures to protect the market. At the same time, China, India, etc. will apply this model to their domestic industries. As for the Thai steel industry, if they want to change production from Gray Steel to Green Steel, where will they find clean energy from? And Thailand’s electricity costs are also more expensive than neighboring countries.
“It is a big wave of Subsidy that is coming in. It is likened to an Infinity War that no matter how much we fight, it will never end. Because it is a fight against government subsidies. Therefore, the view that the steel industry is weak I think that’s the wrong question. But why are the competitors so big? We fight and never win. Because we fight with state funds,” Mr. Win said.
However, the Thai steel industry has overcome this challenge. Steel entrepreneurs must work together to organize themselves to plan a roadmap for raw material procurement. The right technology to reach Net Zero as governments provide green energy and accelerate the rollout of grids to third parties. And the financial sector must help support the steel industry from being Gray. Steel is Green Steel, etc.
Mr. Kriangkrai Thiennukul, Chairman of the Federation of Thai Industries (F.T.I.) said that at present the Thai steel industry is facing risk factors from competitors even though the domestic production capacity is sufficient to meet demand. But importing cheap steel from China Makes the use of production rates lower. 30% of actual production capacity It was found that some types of steel products were dumped from China despite anti-dumping laws (AD).
Therefore, the government sector should have a policy to protect the steel industry to survive. Because it is an important industry that creates stability for the country.
Mr. Wirot Rojwattanachai, Director of the Iron and Steel Institute of Thailand, said that Thailand has an average annual steel consumption of 19 million tons, valued at 500,000 million baht per year. In the first half of 2023 Thailand’s ready-made steel trade It was found that a total of 5.89 million tons of steel were imported, expanding 5.7% from the previous year. Valued at 208,485 million baht, while the domestic steel industry’s capacity utilization in the first half of this year was only 32%, indicating that there is still plenty of capacity remaining, sufficient to meet domestic demand.
Moreover, this year the EU has started implementing the CBAM measure. If this measure is fully implemented in the future, there will be a number of steel products that cannot be imported to the EU. As a result, these steel products must be exported to countries that do not have such protection measures, including markets in ASEAN.
However, the Thai steel industry There is still an opportunity to promote the expansion of production capacity in high-value products that are not yet produced. and control the expansion of production capacity beyond demand at the same time Encourage government procurement by using domestic products, such as the Made In Thailand measure, which will help stimulate more money to circulate within the country. As for trade measures, such as the use of AD measures to counter dumping, It has been found that imported steel products are avoiding AD measures. For example, methods of alloying to avoid tariffs or methods of avoiding AD taxes by moving origins. Thailand should therefore improve the use of AC (Anti Circumvention) measures to counter tax evasion to be as effective as those used by many other countries.