Vietnam steel industry Oct. 2021 - Production recovered while consumption is expected to grow


While world production output is limited due to China's efforts to curb production to meet emission reduction targets. World demand is expected to be high again when many countries are promoting infrastructure investment to stimulate the post-COVID-19 economy, it is likely that the world construction steel price will continue to increase in the next few years. the last 2 months of the year. The selling price of domestic steel products decreased by 1.8-3.5% compared to the pre-adjusted price. Domestic production and sales volume recovered after the gap.


World steel supply and price


Global steel production has decreased for 2 consecutive months (Aug. down 3.1%, T09 down 9.0%) over the same period, and is likely to continue to decline in the coming months as China tries to curb production to meet the demand. meet emission reduction targets.

In that context, ore prices continuously dropped sharply after peaking in mid-July-2021 due to concerns about ore demand. The ore price on November 9, 2021 was at 91.98 USD/ton, this is the lowest price since mid-June-2020, although the ore price has inched up in recent days but not much.


HRC prices in China also dropped sharply from mid-T10. As of 12 Nov., HRC price has decreased by 15.6% compared to mid-October. While HRC price in US & EU is still anchored at high level. HRC price gap in China and US & EU remains high.



Vietnam steel price


After a decline in July & August, the selling price of domestic steel brands increased by 2-3% in September and further increased by 4-7% in October 2021.


However, by the middle of Nov., steel brands had just adjusted their selling prices. As of November 16, the price fluctuated at VND16,500-17,000/kg depending on type and brand, equivalent to a decrease of ~1.8-3.5% compared to the pre-adjusted price. The reason for the downward adjustment of steel brands this time, may be the decrease in domestic HRC prices following the trend of HRC prices in the Chinese market.


Vietnam steel production and sales


In Oct-2021, the whole industry's production grew again positively over the same period, after falling in September. Sales in the month of VSA members also prospered thanks to a strong increase in domestic consumption (>30%) compared to the previous month and to the same period of 2020; especially strong increase in steel pipes (+69.2% MoM) and construction steel (+30.2% MoM).


Domestic consumption is expected to continue to grow thanks to the policy of promoting public investment. However, the growth momentum may be limited by the escalating price of construction materials.


Export is also considered to continue to be favorable when global steel demand is forecasted to increase in the near future when many countries are promoting infrastructure investment to stimulate the post-COVID economy. -19. While the world steel supply is forecasted to be still limited, especially the policy of curbing steel production in China has not shown any signs of stopping.



Steel price outlook


Ore Price Forecast: Based on the actual situation of steel production in China, and the recent actions of the Chinese Government, which continue to require steel enterprises to cut production, we believe that production output China's steel production in the remaining 2 months of the year will continue to decrease, and fluctuate from 70-75 million tons/month. Therefore, it will be difficult for ore prices to increase sharply from now until the end of 2021.


Forecast of world construction steel prices: While world production output is somewhat limited, world demand is expected to be higher than previous forecasts, so it is likely that world construction steel prices will continue to fall. continued to increase in the last 2 months of the year.


Vietnam steel price forecast: Although coke prices continue to increase slightly month-on-month, domestic steel demand recovers, and world construction steel prices remain in an uptrend, but if iron ore and HRC prices are to be expected in China continued to decline sharply as in the past month, the domestic steel price may reduce the upward pressure from now until the end of the year.


Source: Extracted from Vietdata's November 2021 Steel Industry Report