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Thailand’s steel sector may not achieve its projected 10-30% growth in consumption this year given the prolonged protests in capital Bangkok, said Iron and Steel Industry of Thailand (Isit).
“The steel industry in Thailand was recovering well till April this year. But now, with the anti-government protests [lasting for weeks], nobody can predict what will happen next,” said Wikrom Vajragupta, president of Isit.
The anti-government Red Shirt protestors have paralyzed Bangkok since March, with more than 60 people killed and 1,600 wounded.
“We have not seen anything like this before in Thailand. The current situation is worrying,” said Vajragupta at the South East Asia Iron & Steel Institute (SEAISI) conference in Ho Chi Minh.
Isit will revise its initial projected 10-30% growth in steel consumption in Thailand in 2010, from 10.8 million tonnes in 2009, after taking into consideration the latest political development.
“But we cannot say yet how different it will be,” said Vajragupta.
Mills supplying long steel products to the construction sector may be most affected, despite the government’s 1.45 trillion baht ($44 billion) stimulus package launched last September.
“Construction projects that have already started will still continue. But those projects that have not committed investment may see some postponement,” said Vajragupta.
Thailand’s car-making industry exports about 40% of its output so disruptions at home may have less effect.
“For the automobile industry, the debt issues in Greece and Spain will be more pressing,” he said.
Thailand is the largest car maker and assembler in Southeast Asia, producing up to 1.3 million vehicles annually before the global financial crisis started in 2008.
The industry was given a boost in 2007, when the Thai government promised tax privileges to any manufacturer that invests at least five billion baht in the local production of eco-cars.
Eligible companies must manufacture no fewer than 100,000 units per annum from the fifth year and the eco-car must consume less that five litres of petrol per 100 km and comply with Euro-4 standards of carbon emissions of less than 120g per km.
Carmakers Nissan, Honda, Mitsubishi, Suzuki and Toyota invested in Thailand under the project.
The Bangkok protests call for prime minister Abhisit Vejjajiva’s resignation and an election in three months.