Steel prices to rise this year, but not significantly: trading floor exec

By Lan Do
Thu, January 18, 2024 | 10:53 pm GMT+7

Several domestic and international factors will push steel prices up this year, but not by much, said Nguyen Ngoc Quynh, deputy general director of the Mercantile Exchange of Vietnam (MXV).

On Thursday, Hoa Phat’s CB240 steel coil line was priced at VND14.14 million ($575.6) per ton; and the D10 CB300 rebar steel price at VND14.53 million ($591.5) per ton, up 1% compared to early January, according to Steel Online, a popular site that follows steel prices in Vietnam.

Steel prices are predicted to increase this year. Photo courtesy of the government's news portal.

Steel prices are predicted to increase this year. Photo courtesy of the government's news portal.

Quynh told The Investor that the steel market had just gone through a challenging year with both global and domestic economic development slowing down.

However, this year will be different, he said, adding that steel prices were set to rise slightly above the 2023 average this year, with economic and consumption outlook looking positive.

He said macroeconomic pressures have eased as major central banks reach the end of their monetary tightening cycle.

The World Steel Association (WorldSteel) has predicted that global steel consumption would rise by 1.9% year-on-year in 2024. Manufacturing, automation and infrastructure, particularly those related to energy transition, will remain the primary drivers of steel demand in 2024.

In addition, India is seen as a bright spot in the global steel market, with double-digit growth. The steel industries in Europe and the U.S are also predicted to improve, owing mostly to recovering demand in the automobile and industrial output sectors, as well as lower energy costs and inflation, Quynh noted.

However, the upward movement of global steel prices may be hampered by lower consumption in China, a market that accounts for more than half of total steel consumption. Experts believe China's steel consumption peaked in 2023 and will fall by 1.7% in 2024 due to a dramatic drop in demand from the real estate sector. So the rise in steel prices might not be significant, at least in the first half of the year.

Quynh said steel prices in the domestic market typically follow global trends. With steel prices and raw material costs in China expected to continue rising in late 2023, steel manufacturers have seen five consecutive price hikes since November 21, 2023, ending a 19-year period of decline, he added.

Meanwhile, domestic steel prices have bottomed out, but there is still plenty of space for price increases in 2024, when consumption is expected to improve. Construction steel prices could reach VND15 million ($610.69) per ton.

Domestic demand to recover

In its latest steel market assessment, SSI Securities said demand may recover in 2024, particularly in the domestic market. Experts with the brokerage predicted that total steel consumption could rebound by more than 6% year-on-year in 2024, with domestic demand growing by about 7%.

The domestic channel began to rebound at the end of 2023, with sales value growing 13% between September and November. This followed a 20% decrease in sales volume from January to August 2023. Steel demand in 2024 will be boosted by improved macroeconomic conditions and a stronger real estate industry, the experts said.

They estimate that profits for steel businesses may have bottomed out in 2023 and could likely rebound over the next 2–3 years.

The SSI experts expect steel businesses' earnings to climb significantly in 2024 from a low base in 2023, owing to increased consumption and output, particularly by the Hoa Phat and Hoa Sen groups. Steel businesses' gross profit margins have recovered from a multi-year low, indicating a halt to the decreasing trend of recent years.

SSI anticipates stronger profit growth in the first half of 2024 due to the low base in the first half of 2023. The recovery trend may continue, but consumption demand and profit margin remain erratic, making steel stocks appealing to investors with high risk tolerance.

Comments (0)
  • Read More
EC postpones Vietnam’s seafood inspection until year end

EC postpones Vietnam’s seafood inspection until year end

The European Commission (EC) has delayed its fifth inspection of Vietnam's efforts to combat illegal, unreported and unregulated (IUU) fishing to the end of 2025, according to the Ministry of Agriculture and Environment (MAE).

Southeast Asia - Tue, May 6, 2025 | 8:53 am GMT+7

Thailand lowers growth forecast for 2025

Thailand lowers growth forecast for 2025

The Thai Ministry of Finance has cut its forecast for the country’s economic growth this year to 2.1% from 3%, saying that the impact of U.S. tariffs and a global slowdown would weigh on Southeast Asia's second-largest economy.

Southeast Asia - Tue, May 6, 2025 | 8:49 am GMT+7

Vietnam’s top lighting manufacturer Rang Dong posts 48% drop in Q1 profit

Vietnam’s top lighting manufacturer Rang Dong posts 48% drop in Q1 profit

Hanoi-based Rang Dong Light Source & Vacuum Flask JSC, a veteran in Vietnam’s consumer goods sector, reported a 48% decline in Q1 post-tax profit to nearly VND101 billion ($3.9 million), blaming intensifying competition from Chinese imports and foreign-invested enterprises.

Companies - Tue, May 6, 2025 | 8:17 am GMT+7

Vietnam spends $1.8 bln on coal imports in Q1, mainly for power plants

Vietnam spends $1.8 bln on coal imports in Q1, mainly for power plants

Vietnam spent more than $1.8 billion importing 17.27 million tons of coal in Q1, primarily to fuel thermal power plants, according to the General Department of Customs.

Economy - Mon, May 5, 2025 | 10:24 pm GMT+7

Vietnam’s utility major REE records 27% net profit growth in Q1 on power segment surge

Vietnam’s utility major REE records 27% net profit growth in Q1 on power segment surge

Private utility firm REE Corporation posted strong profit growth in Q1, primarily driven by a significant improvement in its power segment compared to the same period last year.

Companies - Mon, May 5, 2025 | 10:00 pm GMT+7

Vietnam to hold first round of trade talks with US on Wednesday

Vietnam to hold first round of trade talks with US on Wednesday

Vietnam will hold its first round of negotiations with the U.S. on bilateral trade Wednesday, Prime Minister Pham Minh Chinh said at the ongoing session of the country's parliament.

Economy - Mon, May 5, 2025 | 4:40 pm GMT+7

Nestlé Vietnam announces new investment in flagship coffee plant

Nestlé Vietnam announces new investment in flagship coffee plant

Nestlé will make an additional investment of $75 million to expand its Nestlé Tri An plant in the southern Vietnam province of Dong Nai, bringing its total investment in the facility over 2024-2025 to $175 million.

Companies - Mon, May 5, 2025 | 4:35 pm GMT+7

Vietnam legislature’s ongoing session to mark 'historic breakthrough in institutional reform'

Vietnam legislature’s ongoing session to mark 'historic breakthrough in institutional reform'

The National Assembly's session which opened on Monday morning will make a critical step forward in institutional reform, paving the way for a new era of modernization, digital transformation, green growth, and sustainable development, said the parliament's Chairman Tran Thanh Man.

Politics - Mon, May 5, 2025 | 3:53 pm GMT+7

Business confidence in Vietnam drops to 44-month low over US tariff concerns: S&P Global

Business confidence in Vietnam drops to 44-month low over US tariff concerns: S&P Global

Business confidence in Vietnam dropped sharply in April to the lowest since August 2021, as manufacturers were concerned about the impact of U.S. tariffs on production in the months ahead, according to S&P Global.

Economy - Mon, May 5, 2025 | 3:24 pm GMT+7

Ford distributor City Auto chairman’s wife plans $5 mln buy to become major shareholder

Ford distributor City Auto chairman’s wife plans $5 mln buy to become major shareholder

Ngo Thi Hanh, wife of Ford distributor City Auto (HoSE: CTF) chairman Tran Ngoc Dan, has registered to buy 6 million CTF shares to increase her ownership to 6.4%, according to the Ho Chi Minh Stock Exchange (HoSE).

Companies - Mon, May 5, 2025 | 11:41 am GMT+7

HCMC street retail spaces vacant despite rent cuts

HCMC street retail spaces vacant despite rent cuts

Street retail spaces in Ho Chi Minh City, Vietnam's economic hub, continue to face persistent vacancies, as they struggle to compete with modern retail spaces that offer a wider array of goods and services.

Real Estate - Mon, May 5, 2025 | 11:14 am GMT+7

State-controlled giant Vietnam Rubber Group reports strong Q1 profit on high latex prices

State-controlled giant Vietnam Rubber Group reports strong Q1 profit on high latex prices

Vietnam Rubber Group-JSC reported a net profit of VND1,184 billion ($45.5 million) in Q1/2025, 2.5 times higher than Q1/2024, which was largely driven by sustained high rubber latex prices amid rising global demand and tight supply.

Companies - Mon, May 5, 2025 | 8:22 am GMT+7

KRX trading system to go live on Monday: A 'pivotal milestone' for Vietnam's market status upgrade

KRX trading system to go live on Monday: A 'pivotal milestone' for Vietnam's market status upgrade

The official launch of the new KRX trading system on May 5, after more than a decade of preparations, will mark a pivotal turning point for Vietnam’s stock market status upgrade, said Nguyen Duy Hung, chairman of leading broker Saigon Securities Inc. (SSI).

Finance - Sun, May 4, 2025 | 10:02 pm GMT+7

Vietnam distributor of Chinese EVs reports big profit growth in Q1

Vietnam distributor of Chinese EVs reports big profit growth in Q1

Vietnam’s TMT Motors Corporation (HoSE: TMT), the distributor of Chinese electric vehicle brand Wuling, reported VND33.76 billion ($1.3 million) in Q1 after-tax profit, about 125 times higher than Q1/2024.

Companies - Sun, May 4, 2025 | 7:38 pm GMT+7

Vietnamese EV maker VinFast signs loans worth $190 mln for Indonesia plant

Vietnamese EV maker VinFast signs loans worth $190 mln for Indonesia plant

VinFast, the electric vehicle arm of Vietnam's leading private conglomerate Vingroup, has secured a long-term syndicated loan agreement worth IDR1.85 trillion ($110 million) and an $80 million accordion facility from two Indonesian banks to finance the construction of its plant in Indonesia.

Companies - Sun, May 4, 2025 | 12:55 pm GMT+7

Vietnam's logistics major Transimex targets 20% profit growth in 2025

Vietnam's logistics major Transimex targets 20% profit growth in 2025

Transimex, a top logistics firm in Vietnam, targets net profit of over VND204 billion ($7.8 million) for 2025, up 20% year-on-year, on revenue of over VND3.36 trillion ($129.2 million), up 1%.

Companies - Sun, May 4, 2025 | 12:23 pm GMT+7