Formosa Ha Tinh raises steel prices over higher costs

Taiwan-invested Formosa Ha Tinh Steel Corporation (FHS), one of the biggest steel producers in Vietnam, has increased the prices of steel and steel billets in the first two months of the year due to higher production costs, the firm explained.

In particular, the firm increased the price of SAE1006 hot rolled coil (HRC) by $60 to $694 per ton.

Many pipe and galvanized steel producers have expressed concerns over the hiked prices, however their need for HRC is inevitable.

Formosa Ha Tinh attributed the elevation to higher prices of iron scraps, iron ore, steel billets, and transportation costs. Besides, impacts of the U.S. dollar appreciation are expected to continue to the third quarter of this year, it added.

The firm noted that the price of steel may continue the upwards trend due to the higher selling prices in China.

According to the Vietnam Steel Association (VSA), the elevation of HRC prices in China was due to the appreciation of the Chinese yuan and positive sentiments amid China’s border reopening.

Vietnam’s steel sector can recover this year thanks to China’s reopening, domestic firms approaching foreign markets, and the Vietnamese government’s strong efforts to accelerate public investments in infrastructure.

Steel prices in Vietnam have increased by five or six times since the beginning of this year, the VSA reported. February steel prices went up 5% from end-2022 but were about 8% lower than those in February 2022.

The steel price of Hoa Phat Group, the largest Vietnamese steelmaker, reached nearly VND16 million ($678) per ton by end-February, approaching the peak of VND19 million ($805) in May 2022.

Steel output in Vietnam dropped 11.9% year-on-year last year to 29.34 million tons, while sales fell 7.2% to 27.3 million tons, the VSA reported.

The country spent $11.92 billion on importing 11.68 million tons of steel products in 2022, up 3.04% year-on-year in value but down 5.62% in volume.

It earned $7.99 billion from exporting 8.4 million tons of steel in 2022, down 32.2% and 35.85% respectively, according to the VSA.