Steel price worries grow

The Internal Trade Department has invited steelmakers today to discuss the likely price trend in the second half of the year, in order to give advance warning to buyers.

Iron and Steel Industry Club chairman Payungsak Chartsutipol said it was, however, difficult to predict future prices. The price of scrap and billet will not decline in the short term, while the prices of metals such as manganese have continually increased. "Steel demand has risen around the world, particularly in Asia. It is surprising that automobile sales have risen considerably in spite of skyrocketing energy prices," he said.

According to Thailand's Iron and Steel Institute, the billet price has been risen from US$615 (Bt20,103) per tonne at the beginning of this year to $890 in April, while rebar  surged from $660 per tonne to $925. Scrap  remains at a high $650 to $700 per tonne.

Due to rapidly changing steel prices and the shortage of upstream steel in the global market, local steelmakers have reduced their inventory, only adding to price fluctuation.

A Commerce Ministry source said yesterday that since the start of May, the Internal Trade Department had allowed steel rod and hot-rolled steel prices to increase by Bt7 per kilogram on average.

But the department has denied that steel prices have been changed, the source said.

The department has been insisting it has not approved any hike in steel rod and hot-rolled sheet prices since the last increase in February. It has often said that it might allow an increase in steel prices this month and the adjustments could be effective upon endorsement from the commerce minister.

However, evidence was found of increased steel prices on the department's website, the source added.

About 100 contractors will meet PM Samak Sundaravej today to submit proposals to ease their burden from rising costs. "What worries us most is the impact from rising steel prices. While the government's projects have fixed the 'K' cost [the amount construction-material prices can rise] at 4 per cent, it is not enough to compensate our costs that are rising more than 20 per cent," said Aungsurus Areekul, secretary-general of the Thai Contractors Association.