Bangkok Acts: Steel Scandal Prompts Urgent Quality Checks
The Federation of Thai Industries (FTI) is advocating for stricter steel quality regulations in Thailand, particularly regarding imports. This follows concerns that substandard materials may have contributed to the collapse of the 30-story State Audit Office building. The FTI’s Iron and Steel Industry Group has issued several recommendations to mitigate these risks. These focus on enhanced quality control throughout the supply chain—from production and importation to consumer education.
Bantoon Juicharern, chairman of the FTI’s Iron and Steel Industry Group, emphasized the need for rigorous production standards and stronger regulatory oversight. He also stressed the importance of educating consumers to prioritize quality-certified steel over cheaper, potentially substandard alternatives. A key proposal is mandatory quality inspection of all imported steel products, including prefabricated structures. Thailand imported 700,000 tonnes of these products in 2024. Mr. Juicharern highlighted the crucial need for enhanced transparency in quality control, tracking steel from production to final use. This involves stricter enforcement of industrial certification and traceability mechanisms, along with public awareness campaigns guiding consumers toward high-quality steel.
Enhancing transparency in quality control is crucial. Measures should track and verify steel quality from production to final use.
According to this link, the FTI estimates Thailand’s steel demand this year at 16.0–16.3 million tonnes, down from the pre-COVID-19 level of 18–19 million tonnes. The FTI cites China’s steel production surplus as a significant challenge. China’s annual production of 1.1 billion tonnes surpasses its domestic demand of approximately 900 million tonnes, resulting in a 200-million-tonne surplus often exported to Thailand and other ASEAN countries. This influx, potentially including substandard materials, is a major concern.
The FTI reports that approximately 30,000 tonnes of substandard steel—specifically aluminum-zinc coated steel (SZACC) misrepresented as magnesium-coated steel—have been imported to evade mandatory standards and anti-dumping duties. Primarily arriving through Laem Chabang Port, these imports raise concerns about tariff evasion and necessitate stricter customs inspections. The FTI urges legal action if discrepancies arise between declared and actual product classifications. Further complicating matters, since China’s 2017 ban on induction furnace steel production due to environmental and quality concerns, many producers have relocated to Thailand, exacerbating overcapacity, aggressive price competition, and concerns about product quality and environmental impact.
Q&A:
- Why is the FTI pushing for these changes now? The recent collapse of the State Audit Office building highlighted the risks of substandard steel, prompting the FTI’s call for stronger regulations.
- What are the potential consequences of not addressing this issue? Continued use of substandard steel could lead to further structural failures, posing safety risks and potentially harming Thailand’s construction industry.
- How will these recommendations affect consumers? Consumers will benefit from increased access to high-quality steel and greater market transparency, resulting in safer and more durable construction.
The FTI also emphasizes fair competition within the Thai steel industry. They propose that domestic producers should compete fairly against imports and relocated factories, requiring adherence to the same labor laws, environmental regulations, tax codes, and product quality standards. To support domestic producers, the FTI suggests government procurement targets mandating at least 50% domestically produced steel for public sector projects, extending this to Public-Private Partnership projects. Finally, the FTI encourages government promotion of “green steel” for a more sustainable future. These recommendations have far-reaching implications, potentially reshaping the Thai steel industry, impacting construction practices and international trade relations.
