This thesis attempts to analyze the comparative advantage of hot-rolled sheetsteel industry in Thailand during the period before and after changing exc.hange ratesysten from basket system to managed floating system. The concept of DomesticResource Cost (DRC) is utilized as a measure of the comparative advantage in thisindustry. The study finds that prior to the changing exchange rate system Thai hot-rolledsheet steel industry had enjoyed the comparative advantage. It implied that the costof production for hot rolled sheet steel in the country is cheaper than importedproduct. Therefore, during this period the domestic production can save foreigncurrency. However, after the exchange rate system has been changed in which Thai bahthas been devalued more than 50 percent against U.S. dollar, then the industry lostits comparative advantage because cost of imported raw material is accounted to bemore than 50 percent of the total cost of production. Sensitivity analysis is also employed to reveal the comparative advantage ofthis industry. It shows that currency exchange rate is not only a major factor butsale price of imported product is also a key factor effecting the comparativeadvantage. Therefore, the government policy that aims to support the hot-rolled sheetsteel locally produced in the country should emphasis on a tariff barrier so that itwill affect the price of imported product. This kind of protection would successfullyboost the comparative advantage of the country.