Thailand's scrap steel imports are reshaping how Asia trades. Here's what's actually happening.

By Siam Sukkhee Trading Co., Ltd — 2026-06-30 — metals recycling Thailand

I was looking at the import numbers last week. Thailand pulled in 1.68 million tonnes of scrap steel in the first eleven months of 2025.

A 59 percent jump. Not incremental. Not gradual.

Most people talking about Asian steel are still fixated on China's overcapacity problem. Fair enough — it's massive. But that's not where the real story is anymore, if I'm being honest. The interesting bit is happening further south, and it's been building quietly while everyone was looking elsewhere.

Thailand runs almost entirely on electric arc furnaces. That means scrap steel, not iron ore. The country has around 10 million tonnes of annual steel production capacity, which sounds substantial until you realise the utilisation rate sat below 30 percent in 2024. You've got all this capacity sitting there half-empty, pulling in finished steel imports just to meet local demand, while simultaneously desperate for feedstock to feed the mills they've already built. The 59 percent surge in scrap imports across 2025 is both of those things happening at once.

Southeast Asia as a whole is shifting.

According to Fastmarkets data from their Bangkok conference, iron ore-based steelmaking will account for 57 percent of Southeast Asian capacity by 2026. It was 5 percent back in 2011. Scrap-dominant production — the thing that made up 95 percent of the region's steel mills fifteen years ago — drops to 36 percent. Actually, that's not quite right. It doesn't disappear. The absolute volume of EAF steelmaking keeps growing, even if its share shrinks relative to new blast furnace builds. More capacity means more tonnes of scrap to source. Simple as that.

Now look at the bigger picture. South Korea's scrap imports fell 19 percent year on year in the first ten months of 2025, landing at 1.49 million tonnes. Taiwan's were down 36 percent to 1.63 million tonnes. Both countries have weak domestic demand and cheap Chinese steel flooding the market. Southeast Asia — with infrastructure buildout happening and a younger industrial base — is holding where others aren't. Something like that.

The pricing squeeze

Global scrap steel was trading around $415.50 per metric tonne as of mid-May 2026. That's a 4 percent annual gain, more or less, but still crushed by the fact that Chinese EAF mills were barely buying imported scrap through early 2026 because their production conditions were unprofitable. For Thai and Vietnamese buyers, that created downward price pressure from one direction. Tighter supply and higher freight costs pushed the other way.

Two forces at once.

Here's the thing, though. Thailand's capacity utilisation problem hasn't gone anywhere. Mills running at less than 30 percent can theoretically absorb more feedstock, but only if finished steel demand picks up domestically or if exports become competitive. Right now, cheap Chinese material makes that second option look worse than it actually is on the spreadsheet. The math doesn't work the way you want it to.

Vietnam, Indonesia, Malaysia — they're each expanding their own EAF capacity. Gradually pulling more scrap tonnes toward the region. Thailand isn't alone in that trend. It's just furthest along, as far as I can tell.

Tags: Thailand scrap steel, EAF steelmaking, Southeast Asia scrap imports 2026