Local steel prices are expected to slide in the second half of the year, driven by the slowing of investment projects as inflation stalls momentum, according to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand (ISIT).
"The price of steel products will drop in line with slower world economic growth. That will be the main cause depressing the investment climate, resulting in less demand for steel and then lower steel prices," Mr Vikrom said.
In Thailand, he said demand for steel has dropped significantly because of the momentum of political woes, which have adversely affected the overall economy.
Mr Vikrom, who has recently returned from a regional steel conference in Malaysia, expressed concerns that the development of upstream steel production industry formation in Thailand is far behind compared to others in the region.
He urged the National, Economic and Social Development Board (NESDB) to conclude its upstream steel production study as soon as possible.
"The study should have been done and gone through cabinet consideration a while ago. The delay has caused a lot of frustration for Japanese steel manufacturers who want to produce and supply standard steel for their automobile customers in Thailand," Mr. Vikrom said.
According to the Board of Investment (BoI), four leading steelmakers - Arcelor-Mittal, Japan's Nippon Steel, JFE Steel and China's Baosteel - all have expressed interest in investing in upstream blast furnaces in Thailand.
Mr Vikrom said the delays in finalising industry policies may result in global producers shifting their investment projects to other countries in the region.
