(Hanoi Iron and Steel – HSV) The increase took place in the context of the industry having many new signals, especially after the major market, China, opened.
Trading session on February 8, 2023, steel stocks grew strongly. At the end of the session, most codes HPG, POM, TVN... increased by over 5%, only HSG of Hoa Sen and NKG of Nam Kim Steel hit the ceiling. The increase took place in the context of many new signals in the industry, especially after the major market, China, opened.
It is noted that in the past few months, iron ore prices have increased sharply by over 2 digits, mainly due to investors' expectations that demand will gradually recover in China's leading consumer market.
In addition to China's stimulus policy for the real estate market, which is already under pressure, the upward momentum of iron prices is even stronger as the economy reopens. That has helped the recovery in iron ore prices become more obvious since the beginning of December until now.
Besides, India is also a new factor promoting the steel industry. Poised to overtake China as the world's most populous country by 2023, India is in the midst of a construction boom. Therefore, this economy is emerging as a savior for global steel demand.
Also according to WS's forecast, steel demand in India will increase by 6.7% to about 120 million tons in 2023, the highest growth rate among major iron and steel consuming economies. This number is likely to reach 200 million tons by 2030, with demand for infrastructure investment expected to explode.
On the domestic enterprise side, most leaders of listed enterprises affirmed that the industry's most difficult time had passed. For example, although the leader of Nam Kim Steel (NKG) refused to give many comments, he still emphasized: "I only know that the most difficult period of the last two quarters is over, the beginning of 2023 is expected to be more stable."
Or Hoa Phat (HPG), in the year-end report, the company assessed: "The steel industry has gone through the most difficult period and is on the road to recovery. The company has been closely monitoring market developments to flexibly adjust production and business activities."
According to sources from Kallanish, Hoa Phat has restarted a blast furnace in Hai Duong and increased steel bar capacity by 700,000 tons/year. This blast furnace has been restarted since December 27, 2022 and it will take 7 days to start producing billets. This is also a signal that the construction steel market situation has improved.
In particular, Hoa Phat is also planning to restart one more blast furnace, but it will depend on the market situation and steel demand; At the same time, investing in Hoa Phat Dung Quat 2 Iron and Steel Production Complex, developing new products in the household electrical appliance industry...
Not only Hoa Phat, Pomina Steel (POM) leaders also revealed plans to reopen the blast furnace in the fourth quarter of 2023. Because, the industry's most difficult time has passed, and POM sees that in the first 6 months of next year, demand from public investment projects will increase, promoting increased steel consumption. Not to mention, the real estate market will gradually recover and possibly start again in the last 6 months of the year: This will be a supporting factor for the business activities of the industry in general and POM in particular.
"China ended the Zero Covid policy and the government also had policies to support the real estate market. In particular, in India the steel market grew rapidly due to increased construction demand. World raw material prices increased, causing scrap prices to increase from 370-450 USD/ton.
On the other hand, a bright spot for the steel industry is also related to world inflation decreasing, Western countries reducing interest rate increases and steel demand returning. Or Hoa Phat is also exporting a lot of steel to Europe...", POM added.
Regarding business, closing 2022, most listed steel enterprise groups have announced financial reports with the "picture" expected soon. Among them, 8 businesses recorded a total loss of nearly 4,400 billion VND in the fourth quarter of 2022, corresponding to the 2022 profit of the group of listed steel companies seriously decreasing from 41,000 billion (2021) to only about 5,000 billion VND.
The cause is known to be due to falling demand at home and abroad, plummeting selling prices while rising raw material prices (especially sudden coal prices)..., tightening credit, sharp increases in exchange rates and interest rates, and impacts on business operations.
However, there are still bright spots in the fourth quarter, a series of large companies significantly reduced losses compared to the previous quarter.