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In 2022, the steel sector had a rough year, with both production and sales declining

According to the Vietnam Steel Association (VSA), the steel industry has faced a challenging year in 2022. The production of finished steel products reached 29.3 million tons, a decrease of 12% from 2021. Similarly, sales of all types of steel reached 27.3 million tons, a reduction of 7% compared to the previous year.

In December 2022, VSA reported that steel production and sales increased by 17% and 11% respectively compared to the preceding month. However, they decreased by 21% and 14% respectively when compared to the same period in 2021.

During the fourth quarter of 2022, the production and sales of steel products both negative growth when compared to the previous quarters. However, the export volume of the fourth quarter improved. Specifically, finished steel production for the fourth quarter of 2022 reached 6 million tons, a decrease of 30.5% from the same period in 2021. Finished steel sales for this quarter reached nearly 6 million tons, a decrease of 20% from the same period in 2021. Of this, exports reached 1.4 million tons, a decrease of 29% from the same period in 2021.

For the entire year of 2022, production of finished steel products of all types reached 29.3 million tons, a decrease of 12%, and sales of all types of steel reached 27.3 million tons, a decrease of 7% compared to 2021. Furthermore, finished steel exports of member enterprises of VSA decreased by more than 20% compared to 2021.

VSA stated, "In 2022, despite the fact that the domestic economy recorded a positive growth rate of more than 8%, it was a difficult year for the steel industry."


In the steel industry strategy report for 2023, Rong Viet Securities Joint Stock Company (VDSC) also acknowledged that the steel industry has experienced a significant amount of difficulties in both the export and domestic markets in 2022. The crisis within the steel industry is expected to persist as the negative effects of geopolitical conflicts, post-COVID economic recession, and inflation are unlikely to dissipate quickly in 2023.

VDSC believes that domestic steel consumption in 2023 can be supported by public investment. Specifically, the medium-term public investment plan for the 2021-2025 period will reach VND2.8 quadrillion, an increase of 43.5% compared to the plan for the 2016-2020 period. Disbursement of public investment is expected to accelerate gradually in the fourth quarter of 2022.

Traffic projects will account for a significant proportion of this expenditure, with a total of VND507,400 billion allocated, accounting for 47% of the central budget's medium-term investment capital allocation plan. As such, construction steel manufacturers such as Hoa Phat, Formosa, Pomina Steel, among others, stand to benefit.

As for the export segment, VDSC believes that rapid inflation and the tightening of global monetary policy will reduce investment and consumption demand, leading to weaker steel consumption starting from the third quarter of 2022. Steel exports are expected to remain muted in the first and second quarters and are unlikely to recover until mid-2023 when the pressure to raise interest rates eases global.

(Enterprise & Business)

Steel Industry Report - December 2022

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