Steel price has decreased 9 times in a row with the highest total decrease of about 3.3 million VND/ton. The Chinese steel market is also under great pressure due to severe weather that has forced many manufacturing plants to suspend operations.
On July 17, many steel companies continued to lower product prices with a reduction of up to 250,000 VND/ton. This correction is the 9th consecutive decrease since May 11.
In the Northern and Southern regions, Hoa Phat adjusted down 250,000 VND/ton and 100,000 VND/ton for CB240 coil and D10 CB300 rebar. After adjustment, the price of these two types is 15.99 million VND/ton and 16.5 million VND/ton.
Vietnam Italy Steel, CB240 and D10 CB300 decreased by 250,000 VND/ton and 200,000 VND/ton respectively to 15.91 million VND/ton and 16.36 million VND/ton.
Regarding Viet Duc steel, the above two types of steel decreased by 200,000 VND/ton and 150,000 VND/ton, respectively, to 15.86 million VND/ton and 16.36 million VND/ton.
For Kyoei steel, today’s prices are VND 15.81 million/ton and VND 16.36 million/ton for CB240 and D10 CB300 after reducing VND 150,000/ton and VND 100,000/ton respectively.
Thus, over the past 2 months, steel price has decreased 9 times with the highest total decrease of about 3.3 million VND/ton, depending on the brand, type of steel and region.
Commenting on steel price movements over the past time, VSA said that the steel market in the second half of the year will be more difficult when it is forecast that the domestic construction steel price will continue to decrease, possibly even until the end of the third quarter. while the profit of the steel export segment is not as good as before.
In fact, in the first 6 months of the year, the domestic steel market witnessed many drastic price fluctuations. In the first 3 months of the year, steel price had 7 hot surges and reached 19-19.5 million dong/ton, even up to 20-21 million dong/ton.
But by the beginning of May, the price of construction steel fell again 8 times in a row, down to about 16 million VND/ton depending on type and brand. VSA believes that steel prices will continue to fall in the coming time, possibly even until the end of the third quarter.
According to a report by SSI Research, domestic steel demand decreased by about 6% year-on-year in the first 5 months of the year. After increasing by 15% in the first quarter due to pent-up demand, domestic consumption of finished steel products (including construction steel, galvanized steel and pipe steel) in April and May decreased by about 32% compared to the previous quarter. same period.
SSI Research experts suggest that the significantly weaker demand could be attributed to a combination of three factors: high steel prices, along with a rise in the costs of other building materials such as cement, driving operations. construction stalled. In addition, concerns about steel prices peaking caused distributors to pause stockpiling inventory. Tighter management policies on capital inflows into the real estate sector also affect steel demand and steel prices.
(Source: VNDirect)
VNDirect expects the selling price of construction steel will gradually decrease to the average level in the long term. However, the prospect of a strong recovery in steel demand after the pandemic and high input material prices will make this decline longer than expected. Accordingly, the average selling price of construction steel in 2022 – 2023 will reach 16,100 – 14,500 VND/kg, respectively (down 5% – 15% compared to the current price).
China’s steel market is gloomy
A huge amount of steel – a key raw material in China, which is known as the “workshop of the world” – is in a state of stagnation across the country, as economic growth slows down. so precarious causes demand and steel prices to be dragged down. Any fluctuations in the steel market in China could affect this vast network of supply chains.
During the blockade of the financial center of Shanghai, the price of steel and the price of the main raw material for steel production, iron ore, fluctuated strongly. From the beginning of June until now, the price of steel and iron ore have moved to a clear downward trend.
According to Reuters, China’s crude steel output in June fell 3.3% year-on-year to 90.7 million tons as bad weather affected construction activity. This is down 6% from May.
Steel demand – widely seen as a gauge of the Chinese economy’s health – is reflecting a widespread slowdown in the world’s second-largest economy, even though recent data suggest some Optimistic signs, including industrial output in May increased by 0.7 percent year-on-year.
The futures price of rebar in China on July 18 was 3,750 yuan/ton ($554/ton), down 5% compared to the end of last week.
Since June, China has experienced extreme heat waves above 40 degrees Celsius in the north and central regions. Meanwhile, in the South, continuous floods occurred. Some steel mills in China have also had to suspend operations at some facilities or reduce capacity for earlier maintenance due to low profit margins and high inventories.
China’s iron ore imports in June also fell from a year earlier due to low demand as steel mills are still reducing output and suffering losses due to high inventories and slow orders. In the first half of 2022, China’s steel output reached nearly 527 million tons, down 6.5% year-on-year.
According to the latest survey by My Steel, the actual capacity of 247 Chinese steel mills in July was only about 85%.
Alistair Ramsay, Vice President of Rystad Energy, said the disruption caused by the weather was only temporary. In the long term, China’s steel production situation is still quite positive.
“We forecast steel production to recover in the third quarter to around 276.6 million tonnes and then decline to 261.7 million tonnes in the fourth quarter due to the impact of environmental control policies,” said Alistair. Ramsay said.
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