Steel price hikes expected in March on higher input costs

Under pressure of the price hike of many production materials such as electricity, gasoline and scrap steel, many steel enterprises in the country are preparing to increase steel prices by as much as 10% this month to balance their production costs.

Do Duy Thai, general director of ThepViet Steel Corporation, told the Daily late last week that ThepViet would increase the price of its Pomina steel products by as much as some 10% this month.

Thai said that with the price of power up by 6.8%, gasoline up by VND590 per liter and imported scrap up from US$330 to US$355 per ton, the prices of finished steel products must increase by at least 10% to make steel product production profitable.

ThepViet has an annual production capacity of 1.1 million tons of finished steel products. The factory price of the corporation’s steel products was some VND13 million per ton, said Thai.

Pham Chi Cuong, chairman of the Vietnam Steel Association (VSA), told the Daily late last week that many members of the association were also preparing to increase their steel prices by VND100,000 to VND150,000 per ton.

Cuong said the price hike of steel products was unavoidable as the production cost of materials such as ingots, scrap metal, gasoline and power had surged.

Cuong early this year said the country’s steel industry had expected total steel consumption of some 13 million tons in 2010, up by 10% compared to last year. However, according to the association, national steel consumption in February was nearly 40% lower than January at only 230,000 tons.

Phan Vu Hung, director of Sacombank’s Steel Exchange in HCMC’s Tan Binh District, said the trade of both industry and construction steel products on the exchange had been quiet.

Hung also said transactions were expected to be eventful after March when construction projects would start again after some weeks off for Lunar New Year holiday.

According to VSA, early this year steel product prices increased by some 10% due to import ingot materials surging by US$30 per ton.

Tags: Vietnam steel, Vietnam steel industry, Vietnam Steel price