Industry offers solutions for rising steel prices

In an informal meeting at Government House two weeks ago, Industry Minister Suwit Khunkitti invited representatives from the steel industry, contractors and involved public agencies to discuss solutions to the rise of steel prices, including the contractors' suggestion to lift the compulsory steel standard.

"Steelmakers have tried to offer several solutions - for example, that the government negotiate to buy scrap from other countries and turn this raw material into billet in steel plants with non-performing loans," a source said.

This is expected to be a win-win strategy to help NPL steelmakers, while it should also soften steel prices in the short-term.

In an attempt to avoid lifting the compulsory standard, those steelmakers also suggested that the government consider a tax barrier for exporting steel in the same way that China did.

However, participants could not give a clear answer to how many tonnes local steel companies are exporting nowadays. Is this also a reason for the steel shortage in the domestic market that is pushing up steel prices?

On Wednesday, Thailand's Iron and Steel Industry Association chairman Payungsak Chartsutipol met Suwit to ask for clarity after the committee of the Thailand Industrial Standard Institute (TISI) publicised lifting of the steel standard in newspapers.

Payungsak said steelmakers opposed lifting the standard because of safety concerns. "If we don't have these standards, how can we control steel quality in the country?" he asked.

Asked if local steelmakers would face tougher competition from imported steel whether the lifting of the standard was approved or not, he replied, "We don't think so. Steel prices in the domestic market are cheaper than abroad at present. However, we local steelmakers certainly give priority to supply our products to local markets rather than overseas."

Meanwhile, Suwit said the compulsory steel standard would not be lifted. But he insisted that the TISI would continue publicising its opinion not only about the steel standard but other standards that should be reconsidered.

However, he said he would help contractors by reducing the approval process for importing steel.

Currently, the Industry Ministry approves steel imports project by project, and most of these projects import steel that cannot be produced in Thailand.