Steel prices continue to fall

Steel retailers are suffering significant losses due to overstock and price cuts during the construction season.

Since the beginning of this month, steel mills have reduced prices by VND300,000 – VND600,000 per tonne in an attempt to clear their stockpiles.

The steel price hovers around VND3 million per tonne, less than its zenith in April.

In March, steel prices saw a sharp increase to US$630 per tonne as there was news that the iron ore price would increase by 40 percent and that the Government would restrain the import of some goods, including construction steel, to curb the trade deficit.

However, in the face of soaring steel price in a very short time, many customers decided to delay their construction plans for fear of what might eventually happen in the steel market.

Currently, the factory steel prices range from VND11.7 million to VND12.3 million per tonne for scrolled steel and VND12.1 million to VND13.1 million per tonne for steel bars.

VSA said that steel producers had to cut the price due to low demand. Currently, with steel products selling slowly, steel mills are running below capacity.

By April, the sales volume fell to 299,000 tonnes after reaching a record sales volume of 568,000 tonnes in March, and it is expected to drop to 283,000 tonnes in May. Consumption in June is estimated to be even gloomier.

VSA vice chairman Nguyen Tien Nghi said there are currently 371,000 tonnes of finished products and 560,000 tonnes of steel billet in stock.

According to experts, reduced purchasing power in southern provinces is attributed to

the excessive stock piles of steel products going into the rainy season.

The declining trend in the steel billet price in the world market indicated that the steel price could continue to fall.

Domestic steel producers also have to compete against imported steel products which are at roughly VND100,000 – VND150,000 lower than the domestic ones.

VOV

Tags: Vietnam steel industry, Vietnam steel market, Vietnam steel prices