October 07, 2008

Siam United Steel expects 20% price hike in 2008

Bangkok Post reported that prices of cold rolled steel will soar by 20% to 30% in 2008 in line with a supply shortage that has increased global raw material prices.

Siam United Steel said that cold rolled steel, mainly used in automobiles and home appliance manufacturing, had been affected by a rise of USD 200 to USD 250 per tonne in the prices of hot rolled coil.

Mr Payungsak Chartsutipol an executive vice president of Siam United Steel said that prices of hot rolled steel had increased 30% YoY from last year to about USD 800 per tonne after steel ore, the upstream raw material, surged by 65%, together with a 200% increase in the price of coking coal. He added that ''Tight supply in the global market has driven steel prices to rise substantially. We need to increase the local prices to transfer the rising costs to end users.

Mr Payungsak said that ''Every local maker of cold rolled steel tends to move in the same direction on price hikes to make our businesses run further.” He added that Siam United projects flat revenue in 2008 from THB 24 billion in 2007. The tight supply of raw materials also means that the company is unable to increase its manufacturing output this year from last year's 900,000 tonnes. The company's maximum capacity is one million tonnes per year.

Mr Payungsak further added that ''Thailand has no local production of upstream steel, so we mainly rely on imported raw material adding that the company imported 80% of its hot-rolled coil mainly from Japan and Korea.”