Southeast Asia remains the largest overseas growth market for China’s galvanized steel coils and pipes. The Philippines and Thailand have long ranked among the top destinations for China’s galvanized steel exports. Nevertheless, market competition has turned white-hot due to four major pressures: seasonal rainy seasons, substitution by local production, product upgrading, and cross-border trade barriers.
1. Philippines & Thailand: Robust Fundamental Demand, Sluggish Off-Season amid June–October Rainy Period
Sustained Rigid Demand Reflected by May Import Data
The Philippines advances Phase II of its "Build, Build, Build" national infrastructure program, featuring concentrated launches of bridge, port, flood control pipeline and photovoltaic park projects. In Thailand, galvanized coils and pipes are widely purchased for manufacturing plant workshops, distributed PV brackets and agricultural greenhouses.
May 2026 statistics show the Philippines imported 183,000 tons of Chinese galvanized steel, topping the global list, while Thailand imported 162,000 tons as the second-largest buyer. Combined, the two countries account for over 40% of China’s total galvanized steel exports to Southeast Asia, forming a stable demand backbone besides Europe, the US and the Middle East.
Seasonal Demand Downturn Triggered by Rainy Season (June–October Monsoon Season)
Persistent heavy rains and floods during Southeast Asia’s rainy season trigger three major adverse impacts:
- Suspended on-site construction: Large-scale outdoor works for steel structures, PV brackets and municipal infrastructure are halted; general contractors opt to deplete existing inventories instead of placing bulk new orders.
- Disrupted inland logistics: Delays in inland river and highway transportation prompt downstream distributors to cut stockpiling plans to avoid inventory backlogs.
- Cautious order placement: Project schedules get postponed with extended payment cycles, and overseas buyers become more aggressive in price negotiation, resulting in a sharp drop in transaction volumes.
The annual procurement peak falls in the dry season from November to April, whereas June and July represent a cyclical demand trough.
2. Two Core Headwinds Facing Thailand’s Market: ZM Substitution & Mandatory Zinc Coating Standards, Shrinking Market Share of Low-End Exports
Local Mass Production of Low-Cost ZM Coated Steel Cannibalizes Orders for Traditional Hot-Dip Galvanized Products
Major Thai steel mills have launched large-scale production lines for Zinc-Aluminum-Magnesium (ZM) coated steel, which holds inherent competitive edges over conventional hot-dip galvanized steel:
- Its corrosion resistance is 3–5 times higher than pure zinc galvanized steel, extending the service life of coastal PV and factory roofing materials, perfectly fitting Thailand’s high humidity and salt fog climate.
- Mass local production keeps its terminal price merely 15%–25% higher than ordinary galvanized steel, delivering lower long-term maintenance costs, so general contractors prioritize domestically manufactured ZM sheets.
Local ZM products squeeze market space for China’s regular hot-dip galvanized steel. Inquiries for low-priced Z60/Z80 galvanized coils from China have declined notably, with buyers shifting to local supplies.
Mandatory 60–70g/㎡ Zinc Coating Threshold Eliminates Low-Grade Thin-Coating Chinese Goods
Thailand’s housing construction and photovoltaic sectors have issued binding specifications: imported galvanized steel for construction and PV applications must carry a minimum total double-sided zinc coating weight of 60–70g/㎡. Non-compliant cargo will be detained at customs and banned from construction sites.
A large volume of low-cost galvanized steel exported from China only carries a 30–50g zinc coating, failing to meet access criteria. Exporters have to upgrade to Z70 and above heavy zinc coating products, lifting production costs by USD 30–60 per ton and wiping out the price advantage of low-end products. Most small and medium-sized orders are captured by local steel mills.
Market Outcome
Spot prices of galvanized steel in Thailand keep sliding. Chinese conventional galvanized steel can only compete for small retail orders and temporary low-standard factory buildings, while bulk high-value orders for PV and municipal infrastructure are mostly monopolized by domestic ZM products.
3. Vietnam: Expanding Domestic Capacity & US Section 232 Tariffs Double Downward Pressure, Sparking Regional Hyper-Competitive Pricing
Rapid Capacity Expansion Stimulates Domestic Substitution
Vietnam’s three major steel giants – Hoa Sen, Nam Kim and Hoa Phat – keep adding galvanized and ZM coating production lines, lifting the annual capacity of coated steel to over 6.8 million tons with drastically improved local self-sufficiency:
- Government steel industry support policies grant tax subsidies to domestically manufactured galvanized steel, undercutting import prices from China.
- Long-term anti-dumping duties up to 37.13% have been imposed on Chinese galvanized steel since 2025, raising import costs and pushing downstream buyers to choose local alternatives.
- Domestic coated steel exports slumped 40% year-on-year, with goods originally destined for Europe, America and other Southeast Asian markets diverted to absorb domestic demand surplus.
US Section 232 25% Steel Tariffs Close Off Vietnam’s Transshipment Export Channel to the US
Vietnam once relied on rules of origin to transship galvanized steel to the US and evade the 25% punitive tariff on direct shipments from China. Currently, the US strictly enforces Section 232 steel tariffs, levying a uniform 25% import duty on all Vietnamese coated steel, completely invalidating the transshipment arbitrage logic:
- Vietnamese domestic galvanized steel loses overseas export outlets and floods the local market.
- Oversupply depresses local spot prices, driving Vietnamese traders to dump goods at low prices in neighboring markets including Cambodia, Laos and Malaysia.
- Chinese galvanized steel suppliers, Vietnamese domestic mills and Japanese & Korean import suppliers scramble for remaining Southeast Asian market shares, triggering vicious price competition across the entire region.
4. Overall Southeast Asia Market Review: Coexisting Opportunities & Risks
Core Opportunities
- Stable long-term rigid demand from infrastructure and new energy PV sectors, with definite volume growth during dry seasons, retaining its status as a key growth engine for galvanized steel exports.
- Looser standards in emerging markets such as Indonesia, Malaysia and Cambodia can absorb regular galvanized steel orders squeezed out by Thailand and Vietnam.
- High-zinc galvanized steel and premium ZM coated products face milder price competition and maintain stable profit premiums.
Root Risks Behind Hyper-Competition
- Cyclical seasonal volatility: Weak demand throughout June–October rainy season increases inventory pressure and delays payment collection.
- Domestic industrial substitution: Expanding coated steel capacity in Thailand and Vietnam, paired with trade protection tariffs, continuously erodes market share of low-end Chinese galvanized steel.
- Product iteration impact: ZM coating gradually replaces traditional hot-dip galvanized steel, contracting long-term demand for pure zinc coated sheets.
- Regional supply surplus: Blocked US transshipment routes push excess Vietnamese galvanized steel to peripheral countries, sparking industry-wide price wars.
Export Strategies for Chinese Traders
- Product upgrading: Prioritize Z70+ heavy zinc coating galvanized steel and matched ZM coils to cater to high-end PV projects in Thailand and the Philippines.
- Order staggering: Secure long-term framework orders in dry seasons and cut low-end spot shipments in rainy seasons to avoid price slumps.
- Market diversification: Reduce low-end competition in Vietnam and Thailand, and step up development of emerging growth markets including Indonesia and Myanmar.
- Differentiated product layout: Develop specialized galvanized pipes and high-strength galvanized steel for PV brackets to avoid homogeneous competition with local ordinary coils.
