BSC believes that export steel prices will tend to correct due to the recovery in world supply. Steel prices will gradually return to the long-term average due to the decline in world steel prices due to the supply recovery and the impact of the COVID-19 epidemic.
The Bank for Investment and Development of Vietnam Securities JSC (BSC) believes that the steel price will gradually return to the long-term average level in the near future in the context of a decrease in world steel prices due to the supply recovery and the impact of the pandemic. Due to the COVID-19 pandemic, consumption demand has been reduced.
Faced with the impact of the COVID-19 epidemic on domestic demand as well as the recovery of world supply, BSC believes that steel prices will tend to correct in the upcoming third and fourth quarters.
In that trend, BSC assesses that the growth rate of steel “enterprises” will slow down compared to the peak in the first 6 months of 2021.
The steel industry continued its strong growth momentum in the second quarter with quarterly consumption volume equal to 123% same period last year.
The recovery was clearly recorded in the export market and flat steel products group thanks to the growth in exports in the EU and US markets and the price growth of iron and steel products since the beginning of the year.
Iron and steel exports of all kinds in the second quarter reached 3 million tons, up 57% same period last year with a total value of about US$2.5 billion, up 158% same period last year. Exports increased sharply in markets such as ASEAN, EU and US due to the scarcity of supply in these regions.
The average export price in the second quarter increased 31% same period last year to $731/ton, following the general trend of world steel prices.
Flat steel products contributed most of the growth thanks to the recovery of industrial production in the world.
Meanwhile, construction demand recovered slightly compared to pre-epidemic levels, partly due to the negative impact of the epidemic on investment and spending of a part of the population. BSC believes that the prolonged spread of the COVID-19 pandemic will affect construction activities, causing the growth of domestic consumption to slow down in the second half of 2021.
Prices of iron and steel products have increased sharply since the beginning of the year. Demand recovered quickly while supply decreased, causing input material prices to rise, which caused steel prices in Vietnam as well as in the world to increase sharply.
Steel prices in the domestic market have continued to increase from March to now with price adjustments taking place almost weekly.
Construction steel price has increased by 900-1,500 VND/kg in the first 6 months to 15,250-16,200 VND/kg. Billet trading in the domestic market is around 13,500-13,700 VND/kg.
T&G International Joint Stock Company
Address: 352 Hue Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
Hotline: 0345786803
Email: hrm@tginterjsc.com
Website: http://tginternationaljsc.com
