Tata Steel Thai unit expects net loss for 2014-15 on weak demand

But says outlook for 2015 better than last year

Tata Steel Thailand PCL, the Thai unit of India's Tata Steel Group, said on Wednesday it expected to post a net loss for the fiscal year ending March 2015, hit by falling steel prices and weak demand.

But improved domestic demand and better outlook for steel prices should help it flip to a profit in the next fiscal year, President and Chief Executive Rajiv Mangal told reporters.

Thailand's domestic steel demand is expected to rise at least 5%, to about 18.5 million tonne, in 2015 on the back of an improving economic outlook, while steel prices have bottomed out and should gradually increase, he said.

"Outlook for 2015 should be better than this year, given the country's GDP is forecast to grow 3.5%, which should help boost domestic demand for steel," Mangal said.

Tata Steel also plans to focus on value-added products and boost the sale proportion to between 40% and 50% of the total over the next two years from 20% now, he said.

Hit by oversupply both at home and in markets abroad, Thai steelmakers also faced an increase in imports of wire rods from China on expectation of the removal of an export incentive. That led to buildup of around two to three months in the inventory of wire rods, the company said in a statement.

As the increase in steel imports continued to put pressure on domestic prices, Tata Steel planned to ask the Thai commerce ministry to take anti-dumping measures to tax imported high carbon steel rod from Chinese makers, Mangal said.

An anti-dumping tax of 5% imposed by the ministry last year is too low to stop Chinese product dumping, he said.

Tata Steel posted a net loss of about 252 million baht ($7.7 million) for the nine months ended December, compared with profit of 4 million baht a year earlier, hit by poor demand and the impact of imports of steel bar products from China.

Thailand's domestic steel consumption fell 3.5% to 17.3 million tonnes in 2014 on slowing construction activity, Mangal said.

($1=32.60 baht)