Thailand Manufacturing vs China:
What the 2024–2025 Data Shows
More than 3,500 Thai factories have closed since 2021. Steel capacity utilization hit a record-low 28%. Here's what the public data actually says about Chinese competition — and how Thai manufacturers are responding.
- Factory closures: 3,500+ since 2021; 561 in just Jan–May 2024 (15,342 jobs lost), per the Department of Industrial Works.
- Steel collapse: Capacity utilization fell to ~28% in 2024 (from 33.4% in 2022). Chinese steel = ~43% of steel imports.
- Imports from China: $80.6B total in 2024 — led by electricals ($24.6B), machinery ($13.0B), and plastics ($4.2B).
- Petrochemicals: Chinese oversupply + naphtha cost exposure squeezing margins; PTT, SCGC, IRPC all restructuring.
The closures are real, and accelerating
This isn't a forecast — it's already happening. Thailand's Department of Industrial Works recorded 561 factory closures between January and May 2024 alone, costing 15,342 jobs — roughly 3,000 a month. Stretch the window back and the picture is starker: more than 3,500 factories shut between 2021 and mid-2024.
The Federation of Thai Industries (FTI) points to a consistent set of culprits: cheap Chinese imports landing on top of high domestic production costs — energy, transport, interest rates, and a rising minimum wage. The closures cluster in specific sectors: plastics, metals, rubber, food, machinery, and wood products.
Where China's imports actually land
Thailand imported $80.6 billion of goods from China in 2024 (UN COMTRADE). But the aggregate hides the concentration. Here's how it breaks down by category:
Electrical and electronic equipment dominates at $24.6 billion — nearly a third of all imports from China. Machinery follows at $13.0 billion. But the categories that hit domestic manufacturers hardest aren't always the biggest by value — they're the ones where Thai producers directly compete: plastics ($4.2B), steel articles ($4.5B), and raw steel ($3.6B).
Steel: the clearest casualty
No sector illustrates the squeeze better than steel. Thai steel capacity utilization fell to roughly 28% in 2024 — the lowest in seven years, down from 31.2% in 2023 and 33.4% in 2022 (FTI). More than 70% of the flat steel market is now met by imports.
Two forces compound here. China exported 105 million tonnes of steel globally in 2024, and direct-plus-indirect shipments to Thailand rose 7% year-on-year. On top of that, Chinese firms are building 12.42 million tonnes of steel capacity inside Thailand — against total Thai demand of about 16 million tonnes. Domestic producers are being squeezed from both sides: imports and inward Chinese investment.
Plastics & petrochemicals: the margin trap
Thailand's petrochemical sector — anchored by PTT Global Chemical, SCG Chemicals (SCGC), and IRPC — faces a structural bind. The OECD describes it directly: Chinese oversupply, growing Chinese self-sufficiency in resins, and declining domestic gas reserves are forcing reliance on imported naphtha, whose price swings with global crude. The result is squeezed margins and plant restructuring.
The corporate responses are revealing. IRPC issued an 11-billion-baht bond and is pursuing asset sales under a "domestic first" strategy. SCGC secured a 15-year ethane supply deal from the US to reduce naphtha dependence. Across the board, producers are pivoting toward specialty polymers and recycling — exactly the higher-value niches Chinese mass producers don't dominate.
What Thai manufacturers are doing about it
From the public record and the strategies major players are signalling, three response patterns are clear:
Move up to specialty
SCGC and IRPC are both pivoting to specialty polymers and recycled materials — higher-value niches where Chinese scale doesn't win. The clearest defensible path for technically capable firms.
Control the feedstock
SCGC's 15-year US ethane deal shows the playbook: lock in cheaper, more stable inputs to escape naphtha volatility. Cost control as competitive defense.
Find new export markets
Thai plastics shipments to the US jumped 61.7% early in 2025 on tariff arbitrage. Producers are also leaning on ASEAN frameworks to supply Cambodia and Vietnam.
The common thread: nobody winning is trying to out-price China. They're changing the game — moving to niches, locking in costs, or finding markets where Chinese supply is thinner.
What this means for your business
The macro data tells you the storm is real. What it doesn't tell you is where your specific category sits, or which competitors are entering your channel. Three questions worth asking this quarter:
- How exposed is your specific category? Steel and plastics are in crisis; some niches are barely touched. Aggregate numbers won't tell you which you're in.
- Which of the three strategies fits you? Specialty, feedstock control, and export each demand different capabilities and capital.
- Who exactly is entering your channel? "China" isn't a competitor — specific firms are. Knowing the names changes the response.
This is a public summary built from public data. A 48 Research report goes deeper: your specific category, named competitors entering your market, channel-level pricing, and a response framework tailored to your operation.
One brief a month on doing business in Southeast Asia — China's pressure, trade flows, FDI. Plain numbers, no hype.
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