(Hanoi Iron and Steel - HSV) - Today the domestic steel market announced a price increase, while imported steel scrap was the lowest ever. In the market, the world price of steel products may soon reach the corresponding breakeven threshold...
Domestic market
Domestically, construction steel brands such as: Pomina, Viet Y, Viet Nhat, Viet Sing, and Kyoei have recently announced to increase the selling price of rolled steel products and rebar steel bars by 300,000 - 390,000 VND/ton. Currently, domestic construction steel prices fluctuate around 14.5-16 million VND/ton, depending on the type of steel and brand.
Vietnam's imported steel scrap decreased by 44% in the first 11 months of the year because domestic steel demand was constrained by the weak real estate market and many factories proactively cut production scale. According to statistics from the General Department of Customs, in November 2022, Vietnam's scrap import volume reached about 252,000 tons, down 17% over the previous month and 44% over the same period last year.
Currently, the price of scrap steel type HMS1/2 80:20 imported from Dong A port is adjusted down by 11 USD/ton, down to 394 USD/ton. Meanwhile, domestic scrap steel prices in October increased from 800,000-1 million VND/ton, currently at 8.2-9.2 million VND/ton.
Domestic steel factories also depend heavily on imported raw materials such as iron ore, scrap steel, coking coal, graphite electrodes... Therefore, when the price of input materials fluctuates, the price of domestic finished steel products must also adjust according to the world market.
According to the latest data from the Vietnam Steel Association (VSA), the price of input materials in recent times has continued to maintain a sharp decline due to the pressure of many factories to cut production.
World market
US steel manufacturers announced an increase in prices of rolled steel products. Accordingly, Cleveland-Cliffs did this in late November with a $60/short ton increase in new orders. Soon after, US Steel and Stelco also increased at 60 USD/short ton. By December 1, Nucor and ArcelorMittal Dofasco also began to increase prices.
Faced with the increase in prices, steel manufacturers warn that the prices of hot-rolled coil, cold-rolled coil and hot-dip galvanized steel have nearly reached their respective break-even points. In addition to the recovery lasting about 2 months (from March to April), by October 2021 it decreased again. That shows prices for steel products remain above record lows seen since MetalMiner began tracking in 2012.
For example, the price of hot rolled steel coil fell to the lowest level of 362 USD/short ton in December 2015. Import prices have increased sharply since then, so the floor price is likely to be higher than the record low. But when steel prices tend to decrease, steel manufacturers have the right to worry that the price of steel products may soon reach the corresponding breakeven threshold.