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December 23, 2008

Weak demand forces Thai steel firm to halt production for 1 month
Thainox Stainless Plc, Thailand's largest stainless steel producer, said on Tuesday it planned to stop production for one month due to weak global demand, reported Reuters.

The shutdown would help the firm save costs at its plant in Rayong on Thailand's eastern seaboard, and allow it to carry out maintenance work, it said in a statement. It had sufficient inventory to serve the market, it added.

"However, during this period, the customers will still be able to place an order and we continue to deliver the finished products as usual as the Bangkok office and other departments not directly related to production continue to work," it said.

Thainox, Southeast Asia's largest stainless steel maker, has an annual capacity of 300,000 tonnes of stainless steel, widely used in the construction, automobile and household sectors.

Around 60 percent of its output is sold on the domestic market and the rest exported, according to the company's website. Thainox gets its raw materials, including hot-rolled coils, from abroad.

Kim Eng Securities said in a research note the company was now running at a low utilisation rate of 53 percent, mainly due to a lack of hot-rolled coils.

Thailand's Mahagitsiri family, which founded the company, recently raised its stake to 58 percent. South Korea's POSCO owns 15 percent, and other major shareholders include Nippon Steel.

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