Surging Steel Prices Despite Decreasing Demand - VnExpress International
Blog post written by Tat Dat on March 22, 2023 at 06:15 pm PT.
An individual working at a Hoa Phat factory is documenting information about their steel products. A photo displaying this action has been kindly provided by Hoa Phat.
In spite of declining demand, the top manufacturers in Vietnam have increased the prices of steel to reach a peak of 7 months.
Hoa Phat Group increased the cost of rebar steel by 0.95% on Tuesday, bringing the new price to VND15.99 million ($678.55) for each ton.
Viet Y, Viet Duc, Kyoei, and Viet My, who are all local steel manufacturers, have made comparable price adjustments. However, Pomina's prices are significantly higher, with a price tag of VND17.6 million, which is 10% higher than the standard market price.
Producers have declared that the cost of steel has been steadily increasing since October of last year because billet production has dramatically decreased, leading to a scarcity of input materials. This has caused steel prices to escalate to their current apex, which is the highest they've been since August.
Steel billets are bars made of raw steel that have not yet been processed for sale. The makers of these billets have reduced their production levels because the prices have been quite low in the previous months.
The need for steel is expected to remain low in the coming months.
The sales of steel products took a huge dip of 23% in the initial two months of 2023 compared to the previous year. The total amount of steel products sold was 3.8 million tons. Additionally, during the same period, the quantity of exports decreased by 10%, reaching just 1 million tons.
According to analysts from Mirae Asset Vietnam, the steel industry is heavily reliant on the property sector. Due to the decrease in the real estate market this year, the steel industry has suffered negative effects.
It is expected that the steel production will decrease by 10.5% compared to the previous year, resulting in less than 17.9 million tons being produced this year.
The producers are optimistic that an increase in government expenditure to VND704 trillion this year, a record-breaking amount, will result in a surge in demand. The government's goal is to distribute at minimum 95% of this sum.
