Steel price increases, steel traders make large profit

Most of steel firms operating in producing and trading steel products reported gaining significant profits in the first three months of this year.

Particularly, in Q1 of 2010, Huu Lien Asia Joint Stock Co (coded HLA) reported reaching an increase of 23.1 percent in after tax profit in comparison with the same period of last year; meanwhile HCM City Metal Joint Stock Co (coded HMC)’s Q1 pre-tax profit jumped by 64 percent and that of Pomina Steel Joint Stock Co (coded POM) up 136.32 percent.

According to the enterprises’ explanation, one of the reasons that led to sharp increase in gained profits in the first three months of this year was thanks to the soar in steel prices. As for POM, the company reported earning additional profit from swapping stocks of ThepViet Steel JSC into Pomina Steel Group in late 2009.

At the beginning of this year, when the world price of steel billet surged, the steel makers raised the steel price respectively. These enterprises explained that they might suffer huge loss if they weren’t allowed to increase the sales price of steel products.

The statistics released by Vietnam Steel Association (VSA) showed that the steel volume sold in May 2010 was estimated at 250,000 tonnes, reducing by 50,000 tonnes in comparison with the previous month. Pham Chi Cuong, VSA’s chair stated that the main reason for this slumping trend was not only due to the steel speculators’ offloading, but also because Vietnam was entering the low season for construction.

At present, the stockpiled volume among the association’s member company was reported at about 300,000 tonnes, the steel billet to be used in June and July of 500,000 tonnes. Meanwhile, the price of imported billet steel continued falling by $20-30 per tonne against the previous month to $595-600 per tonne.

Tuoitreonline

Tags: Vietnam steel industry, Vietnam Steel price