Besides, the steel price gap between Europe, North America and Vietnam is increasing, which means a good profit margin for domestic exporters. Therefore, VDSC expects export volume to increase strongly in the second half of 2021 as in the first six months of the year.
Recorded in the latest industry report from Rong Viet Securities (VDSC), steel consumption has grown positively in the first 5 months of 2021 over the same period in key segments. Consumption of finished steel (including construction steel, galvanized sheet and steel pipe) increased by 22% over the same period, of which domestic consumption increased by 11%. Finished steel export growth was even more impressive at 73%. This shows that Vietnam’s steel industry is well seizing opportunities from recovering demand in other countries thanks to competitive production costs and stable production capacity despite the pandemic.
In the construction steel segment, sales volume increased sharply in the first 5 months of the year, but domestic demand may be weaker in the period from June to September due to seasonality, high selling prices and negative impact of Covid-19.
Sales of construction steel increased 14% in 5 months and reached 4.6 million tons, of which domestic consumption increased 12%. After a strong increase in the period from March to May, VDSC sees sales volume of domestic steel producers weakening in June.
In particular, the rainy season and the new wave of Covid-19 have caused construction activities to become stagnant. In addition to weak demand from the construction industry, agents also faced difficulties in consumption because steel prices increased from 14.5 million dong/ton in March to 17.5 million dong/ton in June (excluding VAT).
Therefore, VDSC believes that domestic demand in Q3 may be lower than Q2 due to the rainy season and the impact of Covid-19. Accordingly, it is expected that steel producers will reduce their selling prices in July before adjusting for the following months due to the increase in raw material prices.
Regarding coated steel sheet, consumption volume had a strong growth in the period and could remain high in the second half of the year due to favorable export activities. Notably, consumption volume increased by 45% in the first 5 months of 2021, reaching 2.1 million tons. Export volume increased by 132% and contributed 56.4% to total consumption, higher than 35.3% in the same period in 2020.
VDSC said steel demand in Europe and North America is currently high, driven by the recovery of construction activity when the disease is better under control. In addition, the EU will continue to maintain safeguard measures on imported steel for another three years. These measures mainly target Turkey, South Korea and China. Therefore, this policy continues to maintain favorable conditions for enterprises to export coated steel sheets in Vietnam.
Besides, the steel price gap between Europe, North America and Vietnam is increasing, which means a good profit margin for domestic exporters. Therefore, VDSC expects export volume to increase strongly in the second half of 2021 as in the first six months of the year.
On the business side, units with the ability to increase production output are currently dominating the market share. In the construction steel segment, HPG and Formosa continued to gain 2 and 1.4 percentage points more market share in the first 5 months of 2021 compared to 2020.
In the galvanized steel sheet segment, HSG and NKG are seizing the export opportunities well because the factories still have large room for growth. HSG’s market share increased from 33.4% in 2020 to 37.2% in 5M2021, while NKG’s market share also increased from 14.4% to 16%. In the steel pipe market, the market shares of HSG and NKG also increased by 3.5 and 2.2 percentage points, respectively.
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
