Low consumption

The housing market has not recovered, leading to poor demand for steel in the first months of 2024. The situation of iron and steel trade and supply at dealers becomes gloomy.

According to Economic and Urban reporters at iron and steel dealers in Hanoi, iron and steel prices have been continuously adjusted down and are being sold at around 14 million VND/ton.

Although from the second lunar month onwards, the construction season begins, the consumption output of businesses is still small, not very positive and no goods are imported.

According to a report by the Vietnam Steel Association (VSA), the production of construction steel in February 2024 is estimated at 833,152 tons, a decrease of 17% compared to the previous month and a decrease of 12% compared to February 2023. Sales are projected to reach 594,811 tons, a decrease of 41% compared to the previous month and a decrease of 33% compared to the same period in 2023. Among them, the export of construction steel is estimated at 142,631 tons, an increase of 24.5% compared to February 2023.

VSA also assessed that construction steel demand in February decreased due to the Lunar New Year holiday, but in general, there are no signs of improvement. Currently, domestic factories face many difficulties due to high inventory price, low selling prices and financial costs.

Forecasting the industry outlook, a representative of Hoa Phat Group said that 2023 is the bottom of the steel industry and the market will be better in 2024. However, the level of growth will depend on many factors, including developments of the US Federal Reserve's (Fed) interest rate reduction roadmap and the prospect of global economic recovery.

Imported steel pressure

Recently, Hoa Phat Group and Hung Nghiep Formosa Ha Tinh Iron and Steel Co., Ltd. sent documents to the Trade Defense Department (Ministry of Industry and Trade) requesting to initiate an anti-dumping investigation on hot-rolled steel products. (HRC) imported from China to Vietnam. The reason is due to a sudden increase in imported steel output as well as a sharp decrease in hot rolled steel prices from China.

In a recent meeting with investors at Hoa Phat Dung Quat Iron and Steel Complex, General Director of Hoa Phat Group Nguyen Viet Thang said that competitive pressure with Chinese steel has become clearer recently.

In the first 2 months of 2024, Vietnam imported more than 1.8 million tons of iron and steel from China, an increase of 3 times over the same period and accounting for 70% of total iron and steel imports.

"Due to China's excessive overcapacity, many Chinese steel companies incurred losses last year. They accepted selling below cost to ensure their products could be exported," stated Mr. Nguyen Viet Thang.

"In the current low demand situation, it is necessary to clarify the dumping margin of HRC hot-rolled steel products originating from China. If it occurs, the Government needs to intervene with strict measures such as quantitative restrictions or raising import taxes to protect domestic production and ensure a fair trade," said master Pham Ngoc Trung.