Steel Market more Stable in September

Prices of construction steel products in September were more stable than the previous month. Selling prices (VAT not included) at northern rolling plants were at VND 7,600-7,750 per kilogram for steel wire rods and VND 7,800-7,950 per kilogram for steel deformed bars. Prices in the south were put at VND 7,850- 8,080 per kilogram steel wire rods and VND 8,100-8,150 per kilogram for steel deformed bars.

 

The Vietnam Steel Association said that in September production output of its enterprises reached 230,000 tonnes, bringing total output in nine months to over two million tonnes. With 225,000 tonnes of finished steel in stock and 320,000 tonnes of ingot steel, as well as the present production capacity of steel plants, the local steel industry will supply adequate construction steel for the local market in October. The Vietnam Steel Association forecasts in October, prices may be up slightly due to a price increase of ingot steel in the world market.

 

Local manufacturers’ concern over cheap Chinese-made steel in the local market has reduced as in late September prices of ingot steel offered by China to the Vietnamese market increased by between US$3 and 7 per tonne as a result of China’s steel export tax refunding policies.

 

According to Nguyen Tien Nghi, deputy chairman of the Vietnam Steel Association, with a rapid development, the Chinese steel industry was facing production capacity surplus. In July and August, China promoted its export of steel to Southeast Asian countries, especially Vietnam. In September, however, China increased export tax rates for ingot steel and constrained the export of the kind of goods while refunding export tax by 11 per cent for finished steel products. As a result, China has reduced its export of steel to the Vietnamese market, helping Vietnamese producers get out of difficulties.

 

A survey of the Chinese market shows that present prices of finished steel products in the market has increased by around US$30 per tonne against July. In the coming time, is may be difficult for Chinese steel to flood the Vietnamese market due to a price increase in Chinese-made steel. Furthermore, Vietnamese customers have not been familiarised with Chinese-made steel. At present, only 5,000 tonnes of Chinese-made steel are sold in Vietnam, or equal between five and seven per cent of the market share. In the final quarter, prices may go up due to an increase in prices of ingot steel. In October, more construction steel products will be needed due to the beginning of a construction ‘season.’ However, the local steel market will become more stable, Nghi said.