The escalating military conflict along the Thailand-Cambodia border is intensifying concerns over the structural vulnerabilities and demand outlook for Thailand's steel industry.

Key Points of Concern

• Geopolitical Risk: The border conflict has entered its 18th day, causing significant displacement and creating regional instability that threatens to disrupt economic activity and construction demand.

• Declining Production: Thailand's crude steel output fell by 1.17% in 2024 to 4.9 million tons, continuing a downward trend.

• Structural Imbalances: The industry faces deep-seated issues, including heavy reliance on imported raw materials (iron ore, scrap) and an overcapacity in intermediate production alongside weak upstream and downstream sectors. The steel plate and coil sector reportedly operates at only about 20% of its total capacity, indicating severe underutilization.

Industry Impact and Outlook

    The combination of geopolitical uncertainty and inherent structural weaknesses presents multiple challenges: potential demand fluctuations, supply chain risks for imported materials, and pressure on already strained production profitability. The industry's ability to navigate this period of heightened uncertainty will be a critical test of its resilience.