ACBS expects the price of construction steel in Vietnam to be above 18 million dong/ton in 2022 thanks to the motivation from public investment and the price of raw materials such as iron ore.
In the 2022 strategy report, ACB Securities Company (ACBS) said that since the beginning of the year, domestic steel brands have continuously increased their selling prices when iron ore prices rebounded and steel demand began to recover.
After 7 consecutive increases, the price of construction steel is fluctuating at 18.9 – 19.6 million VND/ton, according to data of Steel online.
Ponima’s D10 CB300 steel price is currently at VND 19.6 million/ton. (Source: Steel online)
ACBS believes that domestic steel prices will increase further when consumption demand grows by 12-13% thanks to the recovery of construction activities and the Government’s promotion of infrastructure projects.
In addition, the world steel price, the galloping iron ore price is also a driving factor for steel prices in Vietnam in 2022.
Specifically, in the recent report of the world mining association, the plan to 2022 of large iron ore mining companies is very low. For example, mining company Vale set a production target for 2022 to match its 2021 plan because of unfavorable weather conditions and the risk of dam failure in Brazil.
Other major miners also set low targets for 2022, leaving the outlook for iron ore supply growth in 2022 low, at only 2-3%. As a result, the prospect of a tight supply of iron ore could lead to an increase in iron ore prices, leaving the commodity above $150/ton.
In addition, China’s steel demand is expected to recover in 2022 when the Government introduces stimulus packages and increases public investment. This helps steel prices may increase slightly until the end of 2022, surpassing 800 USD/ton.
ACBS expects the recovery of steel demand to keep the construction steel price level in Vietnam above 18 million VND/ton in 2022.
Good steel prices can benefit domestic steel producers such as Hoa Phat (HPG), Hoa Sen (HSG) and Nam Kim (NKG). In addition, steel trading companies such as SMC Trading (SMC) can also benefit from the growing steel market.
Before that, 2021 was a sublime year for Vietnam’s steel industry when the price of bar steel increased by about 50% compared to the beginning of the year.
Despite Vietnam’s prolonged social distancing, Vietnam’s steel industry still maintains double-digit growth with total steel output of all kinds reaching 33 million tons, up 19% compared to 2020; Steel exports reached 7.7 million tons, up 70%.
Source: Kinhtechungkhoan
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