4 Trends in the Thai Aluminium Industry to Monitor
• The aluminium industry in Thailand has been hard-hit by aluminium products from China that are flooding the Thai market.
• The overall production of the aluminium industry, including aluminium sheets and cross-section in 2023 had a total production capacity of 710,000 tons, but actual production is 478,000 tons, an equivalent of 67% of production capacity, with an overall market value of approximately 70 billion baht.
1. The direction that the operators will choose to proceed. One of the three rising businesses in 2024 that the Kasikorn Research Center has forecast include "industries with low carbon emission" while one of the three businesses that may not be so lively this year are "industries with high carbon emission". The Thai aluminium industry is currently at this crossroads because the alternative aluminium such as low carbon aluminium is an important material in the production of EVs. This means that this type of aluminium can stay on top of the trend and become a rising business. Meanwhile, aluminium which is a high carbon-emitting product, will be subject to cross-border carbon tariffss from trading partners from 2026 onwards according to the European Union’s regulations. This will require entrepreneurs to start producing report which incur operating costs and may require investment to adjust their production processes to maintain competitiveness. The amount of steel exported to the European Union that is eligible is approximately 125,000 tonnes, or 6% of steel that Thailand exports to the world market.
2. Aluminium is ranked among the top 15 imported products of Thailand. The data from the Ministry of Finance indicates that "Aluminium and items made from aluminium" were among the top 15 import products in Thailand in January 2024 (latest updated data), ranking 12th with a value of 14,369,922,528 baht, but not in the top 15 export products during the same period. The data from ReportLinker indicates that Thai aluminium imports are expected to increase to USD 4.6 billion by 2026, a 2.2% growth year-on-year. Meanwhile, Thailand's aluminium exports are expected to reach US$2.2 billion by 2026, a 2.4% growth year-on-year.
3. Aluminium extrusion market in Thailand seems to focus on wider industries. This include the entire aluminium extrusion process from raw materials sourcing to finished products. It is an important component of the aluminium value chain to support a variety of application with a strong growth trend. This is due to several driving factors such as the rapid growing rate of construction and infrastructure development in Thailand, and the rise of aluminium extrusion for EV components such as the chassis, frame and body panels, which results in improved fuel efficiency and vehicle performance. The same can be said for aluminium extrusion in the electronics industry especially true for heat sinks and enclosures in electronic devices. In addition, the government's focus on renewable energy projects has stimulated demand for aluminium extrusions in solar panel mounting systems.
4. Favorable regulatory environment and adaptation to global trends. The regulatory environment in Thailand is favorable for the aluminium industry. Thailand has a comprehensive aluminium can recycling system with a recycling rate of 91%, which is the highest in the world. In addition, Thailand has collaborated with the Aluminium Industry Club, National Metal and Materials Technology Center (MTEC) and 11 aluminium producers to determine median greenhouse gas emissions in preparation for the European Union's Carbon Border Adjustment Mechanism (CBAM). Moreover, Thailand is piloting FTIX, a clean energy and carbon credit trading platform.
For those interested in the latest developments in the metalworking industry, join us to expand your perspective, explore technical and production possibilities as well as various innovations and smart materials that will be launched for the first time in the world, in Asia, and in ASEAN at "METALEX 2024," from 20-23 November, at BITEC, Bangkok.