HANOI: The steel industry recovered strongly in both production and consumption outputs and selling prices in November.
The developments were seen as positive signs of the industry regaining growth momentum after a gloomy period, according to insiders.
Data from the Vietnam Steel Association (VSA) revealed that steel manufacturing output in November totalled nearly 2.5 million tonnes, a year-on-year (y-o-y) increase of 34%. Steel consumption topped over 2.5 million tonnes, up 30% y-o-y.
After two months remaining stable, domestic steel prices recorded three sessions of increase in November, especially in the north of the country. The highest price rise in the month was 410 dong per kg on Nov 22. Thanks to increases, selling prices of Hoa Phat and VSA-branded steel exceeded 14,000 dong per kg.
In November, the country’s steel exports hit 7.4 million tonnes, surging 29% over the same month last year with main export markets including Asean, the European Union, the United States, India and Taiwan, the association said.
In the steel industry outlook report released on Dec 13, Vietcombank Securities (VCBS) said the recent recovery in global steel prices was mainly thanks to short-term expectations from the Chinese government’s policy packages and high input-material prices.
VCBS forecast that global bar-steel prices would likely remain at 14 million to 15 million dong per tonne until the end of the first half of 2024, before subsequent price increases.
According to VCBS, increasing global demand would boost Vietnam’s steel industry.
The World Steel Association predicted the global steel demand would see slight growth of 2% by the year-end and continue to grow by 1.9% in 2024. In particular, significant recovery would be seen in European countries, Asia and the United States.
The gradual recovery of the domestic real estate industry would also lay a foundation for steel demand in 2024, VCBS said, adding that the government’s revised policies had gradually removed difficulties for the property sector, which accounted for 60% of local steel demand.
The number of property projects under way showed growth in the north and recovery in the south of the country, helping demand for construction materials recover in the coming quarters, it said.
VCBS estimated that total consumption of construction steel in 2023 would decrease by about 15% before surging by 11% in 2024 and the driving force for next year’s growth would largely come from the recovery of the civil-construction market.
Mercantile Exchange of Vietnam director Pham Quang Anh said he believed that concerted efforts by the government to promote the disbursement of public capital would stimulate demand, domestic businesses and production activity. With robust signs from the realty and construction sectors, the steel market would recover soon, he said.
Meanwhile, VNDirect Securities Corp said that the steel industry would boom in 2024 as the adoption of the amended land law would help remove financial bottlenecks for house buyers, stimulating the real estate market.
According to the VSA, although public investment and the realty market were heating up, which would boost steel demand for the remainder of the year, it was not until the first quarter of 2024 that the steel market would see a strong recovery. — Viet Nam News/ANN
Source: The Star