Vietnam steel prices drop for 16th time in a row
Vietnam's construction steel price has fallen 16 times since the start of 2023 in the gloomy context of the real estate market.
A number of steel producers on Friday lowered CB240 coil product prices by VND100,000 ($4.2) per ton to VND13.5-14.04 million ($567-589), while holding the same selling price for D10 CB300 rebar, according to data from Steelonline.
Steelonline is a brand owned by Steelonline Vietnam JSC, a member of Lavas Group, specializing in the wholesale of construction materials with 15 years of experience.
Vietnam's largest steelmaker Hoa Phat Group simultaneously cut prices for CB240 coil line by VND100,000 ($4.2) per ton in the northern, central and southern regions to VND13.94 million ($585) per ton, VND13.74 million ($577) and VND14.04 million ($589), respectively. The price of rebar D10 CB300 remained unchanged compared to the previous adjustment period, at VND13.89-14.04 million ($583-589) per ton.
Similarly, Vietnam-Italy Steel JSC and Vietnam Germany Steel cut prices by VND100,000 per ton for CB240 coil line to VND13.64 million ($573) and VND13.74 million ($577), respectively.
The CB240 coil price at Kyoei Vietnam (KSVC) fell to VND13.66 million ($573) per ton, down VND100,000, while D10 CB300 steel remained unchanged at VND13.81 million ($580) per ton.
Thai Nguyen Steel also reduced prices by VND110,000 ($4.62) per ton for CB240 coil to VND13.97 million ($586), while rebar stood at VND14.08 million ($591) per ton.
Viet-Sing Steel cut VND100,000 from the price of CB240 coil to VND13.5 million ($567) per ton, but kept the same price for D10 CB300 rebar at VND13.7 million ($575) per ton.
VAS Steel, U.S. Steel, Tuyen Quang Steel, and Tung Ho Steel also cut prices by VND100,000 per ton for CB240 steel coil.
According to Vietnam Steel Association (VSA) data, finished steel production in July reached 2.4 million tons, up 19% compared to June and 7% year-on-year.
Sales of steel of all kinds reached nearly 2.2 million tons in July, up slightly from the previous month and up 9% compared to the same period last year. Of which, steel exports reached more than 703,000 tons, up nearly 40% year-on-year.
In the first seven months of the year, finished steel production decreased by 18% year-on-year. Sales of steel of all kinds was down 14% year-on-year, of which exports increased by 10.5%.
After a difficult period in the second half of 2022, business results at some steel companies are gradually recovering. However, the steel industry is not of the woods due to the gloomy real estate market.
In a recent report, broker KIS Vietnam Securities said that the total Q2/2023 revenue of 24 listed steel companies plunged nearly 28% from the same period last year.
The third quarter of 2023 will be another challenging period for Vietnamese steel producers as market demand is forecast to remain weak due to the rainy season and falling prices that will affect companies’ profit margins.
KIS Securities believed that exports could be a fulcrum for Vietnamese steel producers in Q3 when domestic demand is forecast to slow. Total consumption in Q3 is estimated at 5.8 million tons, up 8% year-on-year but down 9% quarter-on-quarter.
The broker also expected that input prices of steel manufacturers will not increase at the same pace as the market's input prices. Therefore, their profit margins will be slightly affected by falling selling prices.
A hot rolled coil (HRC) price recovery in Q3 will positively affect the revenue and profit of companies from the end of September and throughout the fourth quarter of this year, it added.
KIS Securities added that slowing global economic expansion and domestic issues related to the bond and real estate markets could further threaten the industry's business results.
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