Steel prices remain unchanged

The price of ex-factory steel has remained unchanged for the past two weeks after it rocketed from roughly VND12.4 million per tonne to VND17 million in just a few weeks, according to the Viet Nam Steel Association (VSA).

The VSA reported that after recent increases, the price of steel is currently fluctuating around VND16 million per tonne, including VAT.

Vice chairman of the association Nguyen Tien Nghi said that the price level was reasonable as domestic steel producers had to buy steel ingots that are used to produce construction steel at roughly VND 12 million per tonne.

Previously, it had been concerned that the steel price would continue to rise due to speculation and domestic price hikes.

According to the VSA’s statistics, its members sold 1.22 million tonnes of construction steel in the first quarter, 568,000 tonnes of which were sold in March alone, up 88 per cent over the previous month.

Besides a global price increase of steel ingots, VSA Chairman Pham Chi Cuong mainly attributed last month’s sharp rise and demand in the domestic market to speculation.

Experts forecast that the price of steel will drop in the near future due to competition among domestic steel producers as well as with imported steel.

Steel retailers will also have to sell out their stock to retrieve capital as the country does not have a shortage of steel, experts say.

According to the VSA, domestic capacity for construction steel is currently more than 7 million tonnes per year. Meanwhile, domestic demand for the product is only around 5 million tonnes.

Steel producers also hold reserves at a safe level of about 200,000 tonnes of finished products and nearly 530,000 tonnes of steel ingots, and these volumes coupled with imported steel will satisfy customers needs in coming months.

The Viet Nam Steel Corporation (VNSteel) also forecasts that steel prices in both domestic and global markets will decrease this quarter thanks to increasing supply and more favourable weather conditions.

The weather in Europe and North America has already become warmer, creating more favourable conditions for exploiting and transporting materials for steel production, thus contributing to the increasing supply of the product, according to the corporation.

To stabilise the steel market, the Ministry of Industry and Trade (MoIT) on Tuesday told provincial People’s committees nationwide to ask steel producers and traders in their localities to publicise their prices and to keep a close watch on the steel market to avoid speculation and unreasonable price hikes.

Besides maintaining production and speeding up the construction of on-going steel projects, the ministry also asked the VSA and VNSteel to better manage its steel distribution to cut intermediate costs.

MoIT and the Ministry of Finance are also inspecting steel prices at a number of steel producers in Ha Noi, HCM City, Hai Phong and Thai Nguyen.

VIETNAMNEWS

Tags: Vietnam steel industry, Vietnam steel prices