Since mid-2022, steel enterprises have continued to face difficulties and profits have declined due to impacts from domestic and international markets.
According to data from the Vietnam Steel Association (VSA), in 2022, Vietnam will consume about 18.7 million tons of crude steel, down 19% over the same period last year.
Exports dropped sharply by 32% to 745,000 tons. According to the World Steel Association, global demand is estimated to decrease by 2.3% in 2022 after recovering 2.8% in 2021. This has greatly affected the production and business results of the steel enterprises.
According to data from FiinPro, 15 of 28 surveyed steel enterprises have profit after tax in 2022. According to experts, the decline in domestic and world demand, plunging selling prices and rising raw material prices have affected steel enterprises.
Moreover, tight credit, rising exchange rates and interest rates also contribute to the "catastrophic" business picture of this industry in 2022, according to the "forecast" of the leader of Hoa Phat Group Joint Stock Company (Hoa Phat Group Joint Stock Company-HPG) in mid-2022.
Market demand is expected to recover
Experts at VNDirect Securities Company forecast that in 2023, the steel industry's expectation this year is that public investment disbursement is expected to increase by 20-25% compared to 2022. In terms of exports, the industry's support is the price of steel may be less volatile because demand from the Chinese market is stable after opening with many policies to support and recover the real estate market. But in general, VNDirect said that the steel industry is still struggling in the first half of the year in the context of reduced construction demand and increased input material prices and may only really prosper in the second half of 2023.
However, businesses still try to invest and find new orders to recover business results. For example, at the beginning of 2023, Hoa Phat recorded many export orders to markets in the Americas, Asia and Australia. Steel export output (high quality bar steel, construction coil, and coil steel) in January 2023 reached 46,000 tons.
According to the World Steel Association, steel demand is expected to recover 1% year-on-year to 1.8 billion tons in 2023. In which, the ASEAN region will lead growth in steel consumption thanks to a strong investment orientation for infrastructure. In addition, the European market's steel supply in 2023 is forecast to continue to lack due to high energy prices.
Read more: Steel Industry Report