Posted on 20 Jul 2016
The Viet Nam Steel Association (VSA) has forecast a downward trend for steel demand in the next two or three months despite strong consumption and production of the commodity in the beginning of the year.
The downward trend started in June with a 6.6 per cent month-on-month decrease in the production output of steel enterprises and a 12 per cent plunge in consumption volume compared with the previous month's figures.
Compared with the same period last year, the production output in June reached 1.5 million tonnes, representing a surge of 19.7 per cent, and there was a modest increase in consumption of 2.4 per cent.
According to VSA, the volume of steel produced for construction reached 680,000 tonnes in June, rising 16 per cent year-on-year, but sales went down strongly by 9 per cent to 484,000 tonnes.
VSA deputy chairman Nguyen Van Sua said that the fall in demand was partly a seasonal factor. Another reason was that traders did not want to stockpile to mitigate risks caused by quick fall in prices.
The fall in prices was foreseeable, Sua said, adding that it was a result of fierce competition for market share among traders and the supply glut in both the local and global markets.
In June, prices of steel materials declined by US$15-20 per tonne while finished steel products decreased strongly by between VND800,000 ($36) and VND1 million per tonne.
Sua said to protect local steel producers, Viet Nam had taken some measures, such as trade defence or anti-dumping lawsuits, but they were only short-term solutions.
