Thailand Hot-dip Galvanization Market

Increasing Demand for Galvanized Metals from ASEAN Countries to Fuel Market Growth

The industrial sector across Thailand has witnessed considerable growth over the past couple of decades, owing to increasing Government support and surge in private investments. Government policies and programs, including the National Strategic Plan (2017-2036) have played an imperative role in improving trade relations with several countries and gradually modernizing the core industries of the country to improve export volumes. Moreover, the increasing focus of the Government to upgrade the road, rail, airport, and electricity infrastructure of the country is one of the key factors that has played a pivotal role in driving the consumption of major alloys such as steel, zinc, and aluminum. This factor is expected to provide a boost to the growth of the Thailand hot-dip galvanization market during the forecast period.

Moreover, while the Government continues to strengthen industries in Thailand, a surge in foreign direct investments has also led to an industrial boom in the country– another factor that is likely to increase the adoption of hot-dip galvanization in Thailand. Several players involved in the current Thailand hot-dip galvanization market are increasingly focusing on expanding their production facilities to cater to the rising demand for galvanized products from several neighboring nations, including Vietnam, Laos, Cambodia, Malaysia, and Indonesia. In addition, due to stringent International as well as domestic regulations pertaining to industrial waste, several leading market players are increasingly focusing on minimizing hazardous wastes to reduce environmental impact.

At the back of these factors, along with the booming industrial sector of Thailand, the Thailand hot-dip galvanization market is anticipated to surpass the US$ 1.5 Bn mark by the end of 2030. The soaring demand from the automotive sector is one of the primary factors that is projected to drive the Thailand hot-dip galvanization market during the assessment period.

Widening Applications of Galvanized Metals to Bolster Market Growth

The booming industrial sector across Thailand is anticipated to provide considerable opportunities to the players operating in the Thailand hot-dip galvanization market. Due to advancements in technology, the application of galvanized metals in different end-use industries continues to widen at an impressive pace due to which, the Thailand hot-dip galvanization market is on the course to witness a steady growth rate during the assessment period. Moreover, as the Thailand Government has increasingly offered subsidies to several domestic as well as international companies involved in the current market landscape, the overall prospects of the Thailand hot-dip galvanization market are staring at a bright future. For instance, NS-Siam United Steel Co., Ltd. (NS-SUS), a consolidated subsidiary of Nippon Steel & Sumitomo Metal Corporation (NSSMC) was acknowledged by the Thai Government in 2018 for its improved level of planned maintenance and high production efficiency. Several companies from China, Japan, and India are turning to imports of galvanized products from Thailand due to low costs and high quality.

In addition, the surging demand for hot-dip galvanization from the automotive sector is projected to further drive the Thailand hot-dip galvanization market during the forecast period. Increasing demand and widening applications of galvanized metals across the building & construction, automotive, and electrical & electronics industries are expected to propel the growth of the Thailand hot-dip galvanization market.

Growth Rate of Market to Drop in 2020 amid COVID-19 Pandemic

The Thailand hot-dip galvanization market is expected to tread through a rough patch in 2020 due to the outbreak of the novel COVID-19 pandemic. Several lockdowns imposed by the Government of Thailand to contain the spread of the novel coronavirus have drastically impacted the automotive and the construction sector of the country, thus, leading to a standstill in the demand for hot-dip galvanized products for the automotive and construction sectors. The country is experiencing supply-chain disruptions factory closures and transportation restrictions. This issue is aggravated by its high dependency on intermediate goods from other markets hit by the COVID-19 outbreak, including China, Japan, and South Korea. Likewise, the import of hot-dip galvanized metal was also affected, owing to severe regulations and anti-dumping duties levied by the Government. However, domestic hot-dip galvanizers have begun increasing their production capacity and output in order to curb this demand supply gap. The construction sector is expected to witness expansion due to upcoming infrastructure projects such as Phuket’s planned $1.2 Bn tram system, monorail system planned for the city of Pattaya, and 116 projects associated with Southern Economic Corridor scheme under which the government is investing US$ 3.4 Bn to develop infrastructure. These projects are estimated to boost the construction and steel industries and consequently, fuel the demand for hot-dip galvanized steel in the long-term.

However, as lockdown restrictions are gradually being lifted across Thailand, the Thailand hot-dip galvanization market is likely to show signs of recovery in the upcoming months.

Analysts’ Viewpoint

The Thailand hot-dip galvanization market is expected to expand at a moderate CAGR of ~5% during the forecast period. The market growth can be primarily attributed to economic policies implemented by the Thailand Government, increasing foreign direct investments, high demand for galvanized metals from neighboring nations, and rise in the overall export volumes. Moreover, the booming industrial sector across Thailand is one of the most critical drivers of the Thailand hot-dip galvanization market during the forecast period.

Thailand Hot-dip Galvanization Market: Overview

• Hot-dip galvanization is the process of coating steel, iron, and other ferrous metals with a layer of zinc, by dipping the metal into a kettle/bath filled with molten zinc at a high temperature of around 450 °C (842 °F). Layer of zinc formed on the metal surface further reacts with carbon dioxide and forms zinc carbonate, which protects steel and other metals from corrosion. Hot-dip galvanized steel has diverse end uses and is utilized not only in automotive, but in construction & building applications.
• Hot-dip galvanizing helps in corrosion prevention in various ways. Zinc coated on metal surface acts as a sacrificial anode so that even if the coating were scratched, remaining zinc would safeguard the exposed metal. Zinc forms a barrier that prevents the corrosive substance from entering the underlying substrates. The metallic zinc surface reacts with the atmosphere to form a thin, compact, and tightly adherent patina that is insoluble in rainwater.

Key Growth Drivers of Thailand Hot-dip Galvanization Market

• Steel is a key component in the production of several goods consumed in various end-use industries such as construction, automotive, electrical appliances, and packaging. According to a report published by Iron and Steel Institute of Thailand (ISIT), in terms of steel consumption, the demand for steel is primarily generated from the construction sector, which accounts for almost 57% of total consumption, nationwide, followed by the production of automobiles (18%), machinery (11%), electrical appliances (9%), packaging (4%), and other sectors (1%).
• In 2018, global consumption of steel increased by 3.9% as compared to that in 2017. Meanwhile, consumption of steel in Thailand increased at a rate of 4.8% (or a total of 17.5 million tons) in 2018, owing to an increase in the demand for steel in the construction of government infrastructure projects and private sector real-estate development. In CLMV (Cambodia, Laos, Myanmar, and Vietnam) countries, high investment by governments on industrial and infrastructure sectors boosted steel exports from Thailand by 10.3% to 1.7 million tons.
• Steel and other metals remain highly important building materials for construction activities. The construction industry in Thailand is expanding, which is fueling the demand for hot-dip galvanized metals that can resist a corrosive environment.
• The Government of Thailand launched a National Strategic Plan (2017-2036), which is estimated to focus on improvement of trade conditions, propelling the country’s competitiveness and long-term economic goals by the upcoming planned development in rail, road, airport, and electricity infrastructure
• Rise in focus of the government on the manufacturing sector and continuous strategic investment are key factors significantly boosting the adoption of hot-dip galvanization
• Thailand is also a key exporter of steel products, including hot-dip galvanized steel to countries such as Japan, the Philippines, Vietnam, China, India, Malaysia, and the U.S.
• Among metal types, consumption of hot-dip galvanized steel is high in construction and automotive sectors as compared to that of iron, aluminum, and other ferrous metals. Easy availability, excellent mechanical properties, and corrosion resistance are major factors driving the demand for hot-dip galvanized steel. Upcoming infrastructure projects and emerging auto sector of Thailand are further estimated to propel the hot-dip galvanization market.

Restraints of Thailand Hot-dip Galvanization Market

• For most applications, a galvanized zinc coating is likely to provide some kind of corrosion resistance, and provides strength and flexibility desired by end users. Two main types of galvanized coatings are: Hot-Dip Galvanized (HDG) and Electro Galvanized, also known as Cold Galvanized. The main difference between hot-dip galvanization and electro-galvanization is the cost. HDG coating usually cost 5 times more than electro galvanized coating.
• Another difference is the galvanized surface. In hot-dip galvanized coating, the metallic surface texture is rough and has lot of ‘pimples’. Dull finish containing drips in hot-dip galvanized metal makes it unsuitable for use in architectural or esthetic applications. Meanwhile, electro galvanized coating metal can provide glossy and superior esthetic appearance with the addition of cost benefits. The finished coating of electro-galvanization is smooth, drip-free, and shiny making it ideal for architectural or other applications.

Leading Players in Thailand Hot-dip Galvanization Market

• The hot-dip galvanization market in Thailand is highly competitive. It is dominated by a large number of players across the country. The top three players — POSCO Coated Steel (Thailand) Co. Ltd, NS-Siam United Steel Co. Ltd. and JFE Steel Galvanizing (Thailand) Ltd. — accounted for more than 60% share in 2019.
• Other key players operating in the Thailand hot-dip galvanization market include
  • BJC Heavy Industries PCL
  • Thai Scandic Steel Co. Ltd.
  • Ajikawa & SCI Metal Tech Co. Ltd.
• Manufacturers operating in the hot-dip galvanization market in Thailand are being consistently motivated by the government with constant awards and recognition. For instance, on August 27, 2018, Sahaviriya Steel Industries PLC received an award from by Deputy Prime Minister Prajin Juntong for Outstanding Designated Factory in Energy Conservation at Queen Sirikit National Convention Center on Thailand Energy Awards 2018.

Thailand Hot-dip Galvanization Market – Segmentation

TMR’s research study assesses the hot-dip galvanization market in Thailand based on furnace type, metal type, and end-use industry. This report presents the extensive market dynamics and progressive trends associated with different segments, and how they are influencing the growth prospects of the hot-dip galvanization market in Thailand.