Japan to Ship More Steel to Thailand after Flood Damage

Japanese steel export to Thailand could increase to more than 500,000 tonnes per month in and after April recovering from slump and topping the level before the flood damage. Ministry of Industry Thailand expects domestic automobile production resumes normal operation in April-June and increases by around 30% in 2012 from 2011. Appliances and other manufacturers resume normal operation in February and March after the limited availability of parts supply. The domestic rebuilding activity from the flood damage also increases steel demand for Japanese steel industry.

An official of Thai Mitsubishi Motors said the firm operates at near full capacity. The firm resumed the production in December after one month stoppage due to parts supply disruption. The firm launches third plant for eco-friendly car in March 2012. The firm expands the production by 74% to 400,000 units in 2015 from 2011.

Thai Panasonic had damage at 3 plants of 12 plants in Thailand. The firm stopped production of heat exchanger parts and other operations. The official said the firm resumes 100% operation for non-damaged plants in February-March and resumes normal production at the damaged plants in April-July.

Japan External Trade Organization (JETRO) reported Japanese 3 companies withdraw from Thailand due to the flood damage while total 449 companies had damage. Many of them try to resume the operation.

A source in Japanese trading firm said Japanese steel coil centers reduced the operation to 20-30% level in November-December. The centers improve the operation to near the level before the flood except for centers for Honda Motor with major damage and Toyota Motor with slower operation recovery. Local cold rolling steel mills with shares by Japanese integrated steel makers will resume the operation in January-March.

Japanese steel export to Thailand hit record 4.83 million tonnes in 2010. The export decreased in May and June 2011 due to Japanese major earthquake impact. The export hit monthly record of 480,000 tonnes in October but the volume decreased to 240,000 tonnes in November. When the export increases in 2012, Thai government would increase the quota for tax-free flat steel export under Japan and Thailand Economy Partnership Agreement.