"No one can predict the outcome of the political turmoil or how great an impact violence will have on the economy," the institute's director Wikrom Vajaragupta said.

Still, Wikrom was upbeat on the industry's potential, forecasting it would grow 8 to 10 per cent this year "regardless of the political factor".

The political situation is the most important factor determining domestic demand for steel as both producers and investors have to closely monitor the situation, he said.

There are many projects waiting for investors to decide whether or not to proceed, he added.

Wikrom sees little impact from the delay to transit projects.

The projects' delay will not lower demand for steel because other government-spending projects, including 200,000 more units of low-cost housing, are still proceeding, he said.

Domestic consumption of steel accounts for 70-80 per cent of the industry's output while the rest is exported.

Last year domestic demand for steel totalled 13.88 million tonnes worth Bt262.31 billion, while 2.07 million tonnes worth Bt54.1 billion were exported.

Vikrom said domestic consumption was expanding at a slower pace, but with global prices remaining high domestic manufacturers could earn more from exports to offset any domestic slowdown.

Watcharapong Thongrung

The Nation