The frozen real estate market in Vietnam in the last several months has consequently slowed down the construction market as less and less people are building houses this year, said the Vietnam Steel Association (VSA).
Vietnam steel producers sold 200,000 tons of construction steel last month, down 17.5 per cent over the previous month. The poor figure is attributed to a sudden slump of demand seldom seen in October, the start of the construction season, the association said.
Meanwhile, natural disasters such as typhoons and floods, which ravaged the country’s coastal provinces last month, also slowed down the demand for steel, the association added.
In addition, a number of buyers last month were waiting for the further price reduction predicted for this month, a discount of about 3-4 per cent.
However, the association forecast that the price of steel would go up slightly this month as the import price of steel ingot, the raw material used in steel production, is forecasted to go up to US$370 – US$380 per ton compared to US$355-US$365 per ton last month.
According to VSA, the current retail price of construction steel stands at VND7.5 million (US$474.68) to VND7.7 million (US$487.3) per ton, and steel producers have a combined 230,000 tons of steel in stock to prepare for a sudden rise in demand.
Vietnam consumed 2.2 million tons of construction steel in the first 10 months of the year, up by several per cent (VSA said it is calculating the exact rate) over the corresponding period last year.
With the country’s 25 leading steel producers as members, VSA previously forecasted the demand of construction-grade steel to increase by 3.4 million tons this year, a 20 per cent increase over 2004.
The forecasted increase accounted for the large number of projects slated for 2005.
Vietnam produced 2.8 million tons of construction steel in 2004 – two per cent under its target - as input prices varied and the industry relied too heavily on steel ingot imports.
VNS Online
Vietnamese
