AsemconnectVietnam - Steel prices have plunged to their lowest levels since the end of 2020 amid weak demand on July 21,2023.

 In its latest price adjustment, giant steel producer Hoa Phat Group decreased the retail price of reinforcing bar by 0.97% to VND14.24 million ($602.24) per tonne. The company had earlier reduced rolled steel prices by 1.74% to VND14.04 million. Other steelmakers such as Viet Y, Viet Duc, Kyoei Vietnam and Pomina have also made similar price cuts. The prices are at their lowest levels since the end of 2020, according to data platform Steel Online.
Deputy CEO of the platfom, Bui Duy Anh, said many countries in the world are trying to fight inflation and delaying new construction, leading to this decline in steel prices.
In Vietnam, steel sellers are seeing a drop in orders though demand is usually high at this time of the year, he added.
Steel sales fell by 17.5% year-on-year to 12.5 million tons in the first half of the year, according to the Vietnam Steel Association.
Production exceeded demand by 149,000 tonnes, it added.
Observers had predicted that the market would start to see signs of recovery in the second quarter, but it has not come to pass.
Hoa Phat Group chairman Tran Dinh Long had said at the end of March that the steel sector had overcome its biggest difficulties.
But his company’s first half sales fell by 27% year-on-year to VND2.9 million tonnes.
Securities brokerage VNDirect expects demand to remain weak until the end of the year and construction steel sales to fall by 9.2% this year to 9.5 million tonnes.
Tight power supply still affects steel market
In Vietnam, although the power crunch caused by high temperatures and drought has eased, it still has an impact on the steel market. Downstream demand has declined, and inventories have reached a relatively high level, thereby reducing import purchases. Vietnamese steel mills are looking for more export opportunities.
On June 22, Vietnam Electricity (EVN) announced that the electricity supply is sufficient for Northern Vietnam as water levels rise in hydroelectric dams. However, EVN also warned that because there is no excess energy supply in Northern Vietnam, there may still be a shortage of power supply in the future.
Steel output & sales decrease in Jun m-o-m, y-o-y
According to data from Vietnam Steel Association (VSA), in June, Vietnam’s finished steel production amounted to 2.01 million tonnes, decreasing by 9.52% month on month and by 16.2% year on year. Meanwhile, the sales of steel products amounted to 2.16 million tonnes, a month-on-month drop of 6.41% and a year-on-year decrease of 4%.
In the first six months of this year, Vietnam’s steel production went down by 20.9% year on year to 13.1 million tonnes, and the sales of steel products decreased by 17.5% from the same period a year ago to about 12.48 million tonnes.
Vietnam starts AD investigation on prestressed steel cable products from 3 countries
On July 5, 2023, the Ministry of Industry and Trade (MOIT) of Vietnam announced the launch of the anti-dumping (AD) investigation on prestressed steel cable products originating in Malaysia, Thailand, and China, following a petition submitted by domestic manufacturers on August 9, 2022, alleging that the subject goods were being sold at prices lower than fair value, which injured Vietnam’s industry.
The products involved are classified under HS codes 7312.10.91 and 7312.10.99.
Steel exports to Singapore increase in May m-o-m
According to statistics from Vietnam’s customs, in May, Vietnam’s steel exports to Singapore increased by 12.87% month on month to over US$39.8 million. Meanwhile, the total of Vietnam’s steel exports amounted to over 1.1 million tons, and the value was above US$931 million.
In the first five months, Vietnam’s steel exports to Singapore were merely around over US$40.8 million, falling by 70% year on year. At the same time, the whole Vietnam’s steel exports were over 4.3 million tonnes, increasing by 10.4% year on year.
Vietnamese Hoa Phat group's crude steel production decreases in Jun y-o-y
The largest steel manufacturer in Vietnam, Hoa Phat Group, reported that crude steel production in June was about 520,000 tonnes, down by 23% from the same month a year ago.
Meanwhile, the sales volume of construction steel, billet, and hot-rolled coil (HRC) reached 540,000 tons, a year-on-year decrease of 4%.
In the first six months of 2023, Hoa Phat produced around 2.86 million tons of crude steel, a 34% decrease from the same period of the previous year. Construction steel, billet, and HRC sales totaled 2.9 million tonnes, a 27% decrease from the first six months of 2022.
In the first half year, Hoa Phat's construction steel production decreased by 30% year on year to more than 1.6 million tonnes.
Compiled by T.Huong
Source: Vitic/Yieh