Uncertainly surrounds steel prices for 2010

The retail steel price has increased by 600,000 dong per ton since the beginning of 2010. Analysts say prices may increase further, but not too sharply, while the supply will be exapnsive in 2010.

According to the Ministry of Industry and Trade (MOIT), with high imports, inventories were high at the end of 2009, with an estimated two million tons of finished steel and one million tons of ingot steel.

The current retail steel price is 13.1-13.2 million dong per ton, an increase of 600,000 dong per ton since the beginning of 2010.

According to the Industry and Trade Information Centre under MOIT, demand for steel in 2010 will be high, thanks to Government measures to stimulate the national economy (the demand is forecasted to increase by 10 percent over 2009).

Construction and industrial production steel demand also continues to rise.  However, as Vietnam has inventory volume left from 2009, it will only import some 8.7 million tons of steel, a decrease of 1.05 million tons compared with 2009 and 500,000 tons compared with 2008. This will include 6.5 million tons of finished products and nearly 2.2 million tons of ingot steel.

Steel consumption for February decreased due to the prolonged Tet holiday, but for the first two months of 2010, steel output was estimated to reach 749.2 thousand tons. This increased output 4.6 percent in comparison with the same period of 2009. Inventory volume is estimated at 270,000 tons.

Steel consumption, according to the centre, will increase again in the months to come.

The volume of ingot steel reserved by Vietnam Steel Association businesses is estimated to be 420-450,000 tons, enough to meet domestic demand over at least the next two months.

The General Department of Customs reports that, in the first two months of 2010, Vietnam imported more than one million tons, including 300,000 tons of ingot steel.

During the first quarter of 2010 alone, Vietnam is expected to import 1.5 million tons of steel, including 500,000 tons of ingot steel.

Though additional forecasts vary, most economists believe that steel prices will rise in 2010 in accordance with the world price increase. They cite escalating input material prices and electricity prices, which began March 1, 2010, as well as dong/dollar rate fluctuations that make the imported ingot steel more expensive and the VAT’s return to its normal level of 10 percent.

Still, these analysts say that steel prices won’t increase too sharply and that the supply will be stable.

VietNamNet/SGTT

Tags: Vietnam steel industry, Vietnam steel prices