Vietnam steel market remains stagnant

Steel sales are yet to recover on the local market, despite domestic steel producers' efforts to boost consumption coinciding with the start of the building season, according to the Vietnam Steel Association (VSA).

The association said steel sales for construction declined 3.87% in September compared to August and 2.29% year-on-year to 353.792kt.

Production in September also fell 9.46% from August and 7.43% against September 2012 to 347.780kt.

In the first nine months of the year, steel production reached 3.36Mt, a slim increase of 0.02% against the same period last year, while consumption rose 2.46% to 3.38Mt.

The steel inventory reached 317.504kt in the first nine months of this year, VSA figures showed, adding the inventory remained at a normal rate. Producers had a steel semis inventory of 520kt, which was expected to meet production demand in the coming months.

The selling price of construction steel in the north was reduced by VND100000-350000 (US$4.5-to 15.75) to VND12.24-12.95M/t (US$580.5 – 614.2) in September, as producers sought to counter low demand, according to the domestic market management team under the Ministry of Industry and Trade.

But the domestic market still sits precariously as the building season start, because increased electricity prices have pushed up steel production costs, making it even more difficult for suppliers to remain competitive.

The association said the building season got off to a slow start in September, as many storms and floods hampered projects.

The team expected steel prices to remain stable, while production and consumption would also see little change in months to come.

The association also reported that Vietnam's steel imports in the first eight months of 2013 had surged 26.22% in volume and 11.1% in value to US$4.4bn.

More encouragingly, the country’s steel export volume jumped 23.81% over the same period to 1.4Mt, with value rising 15.26% to $1.2bn. The surge in exports has helped reduce the poor domestic consumption experienced by local steel producers, the association said.

Source: bizhub.vn, Hanoi; 24 Oct 2013