Posted on 28 Apr 2010
After two months of seeing sudden changes, steel prices are at a stand still and now are starting to decrease moderately by 200,000 dong per tonne. However, the decrease is fairly small compared with the previous increase period.
In the past week, enterprises were rushing to lower selling steel prices to withdraw capital. In addition, steel price has been eased thanks to the authorities' examination and supervision over steel retail price.
Viet-Uc steel is retailed at 16.7 million dong per tonne, which is the first retail price reduction from Lunar New Year to now. Pham Thi Hoan, owner of Toan Cau (Global) Steel Co cum retailer of Viet Uc steel said that the above retail price included transport service cost, warehouse cost, business profit and Value Added Tax (VAT).
A sales agent of Thai Nguyen Steel Co (Tisco) in Hanoi's Pham Van Dong St said that the price of such kind of steel was maintained at 14.3-14.55 million dong per tonne (kind of rolled steel D6, D8, D10, and D12) according to the company's announcement on April1 15 (excluding transport cost and VAT). Buyers will have to pay costs for loading, transport and warehouse by themselves.
Tuan Anh, deputy general director of Viet Uc Steel Co said that the construction steel price was common at 15.95 million dong per tonne (VAT inclusive) in the production mill while that of the sales agent Grade 1 of Viet Uc Steel Co stood at 16 million dong per tonne, up 700,000 dong/tonne as compared with March early. Retail shops confirmed this increase.
The retail price of 16.7 million dong per tonne is too high and much different from the selling price at mills, said Vu Thanh Son, Business and Planning Office of Tisco.
Now, the retail price of construction steel surges 3.6 million dong per tonne on the market but that of mills only rises by 2.4 million dong/tonne against March.
According to experts, the enterprises raced to lower prices to avoid the huge volume of stockpiled steel like 2008 when steel prices suddenly fell from peak to bottom. Steel sellers have enhanced sales output to minimise potential damages.
In March, the members of Vietnam Steel Association (VSA) sold 568,000 tonnes of construction steel, which was the sudden rise in steel sales, said Nguyen Tien Nghi, vice chair of VSA. Within a month, construction works could not "absorb" all such a high steel volume, meaning that some big agents kept goods. As per forecasts, April's steel sales could decline 100,000 tonnes month on month.
At this time when the volume of inventory steel is high, a lot of trading companies are forced to cut down selling prices to offload. In addition, the global price of steel billet is tending to reduce $15-20 per tonne.
Nghi focused, 15.95 million dong/tone (VAT exclusive) is the highest price applied on high quality steel SD390. Usually, only high buildings and new big works use the kind of expensive steel. Meanwhile, as for civil works, customers will buy lower quality steel at 13.8-14.3 million dong/tonne of SD290 (VAT exclusive).
May steel producers are boosting the sales of stockpiled steel by raising commission and discount for agents. VSA predicts, steel price will continue decreasing in May based on movements of the market.
