Posted on 22 Apr 2016
Steel prices on the domestic market have gone up again after one month of stability due to higher material prices and rising demand as the construction season has started in Vietnam, according to the Vietnam Steel Association (VSA).
The price of construction steel has risen from VND9.6 million (US$430.7) per ton to VND10.2 million (US$457.6) in the north while the price in the south has edged up to VND9.3 million (US$417.2) per ton from VND8.9 million (US$399.2). These prices exclude discounts and value-added tax (VAT).
In addition to increasing demand at the start of construction season, VSA ascribed the rise in steel prices to higher materials used for steel production.
Particularly, the price of steel ingots in the north has soared to VND8.3 million (US$372.3) per ton from VND6.9-7.2 million (US$309.5-323) early this year while the price in HCMC has shot up from VND6.9-7.1 million (US$309.5-318.5) a ton to VND8.1 million (US$363.4).
The domestic price of steel ingots has inched up as a result of higher material prices on global markets. The price of iron ore imported into China has gone to around US$55 from US$40-42.9 at the end of last year.
In Southeast Asia, a ton of steel ingots is now quoted at US$320 per ton compared to US$250 at the end of last year.
The local steel industry saw strong growth in domestic sales and exports last month. Domestic steel enterprises sold 1.4 million tons on the home market and shipped abroad 220,000 tons, up a staggering 56.3% over the same period last year.
In all, domestic steel consumption in January-March exceeded 3.5 million tons while outbound sales reached 570,000 tons, up 50% year-on-year.
In early March, steel prices soared after the Ministry of Industry and Trade decided to impose temporary safeguard duties on imported steel ingots and long steel products from March 22. At that time, steel prices could rise by up to VND2 million per ton in a day.
Nguyen Van Sua, deputy chairman of VSA, said the steel price fever was triggered by speculation.
Last year, steel consumption picked up 24.3% year-on-year to nearly seven million tons.
VSA said steel demand this year could not grow strongly against 2015 and that supply is ample, especially construction steel.
The country’s annual steel ingot production capacity is around 11 million tons and construction steel output is over 11 million tons a year. In recent years, local steel mills have been running at 50-60% capacity.
