Thailand’s steel industry faces a difficult period as energy and raw material costs are rising. Due to Middle East instability, oil prices have driven up shipping fees for imported iron ore.

In addition, the upcoming electricity tariff hike to 3.95 baht per unit for May to August this year adds more financial strain. Manufacturers plan to increase product prices by over 17% during the April-May period.

With the steel industry’s capacity utilization stuck at around 30% since 2017, some firms may need to stop operations. The Federation of Thai Industries (FTI) expects the national consumption to remain flat at 18 million tons, as private building projects slow down.

Although government-led infrastructure plans provide some relief, domestic producers continue to battle intense competition from low-priced imports coming from China.