Construction steel consumption reaches highest level in 9 months.

Sales of construction steel reached over 958,500 tons in September, marking the first time in a positive trend and the highest level since the beginning of the year.

The above figures were just released by the Vietnam Steel Association (VSA). This represents a 9% increase compared to August and a 4% increase compared to the same period last year. This is the first time this year that sales of construction steel have shown positive growth and reached their highest level in the past nine months.

Improved market demand is also reflected in the business performance of companies. Leading company Hoa Phat recorded its highest sales volume since the beginning of the year. Specifically, sales of construction steel, hot-rolled coil (HRC), and steel billets reached 596,000 tons, a 7% increase compared to the previous month. Construction steel alone contributed 352,000 tons, the highest since the beginning of the year and a 15% increase compared to August.

Similarly, the entire Vietnam Steel Corporation (Vnsteel) system also achieved its highest sales volume since the beginning of the year in September. Over 268,000 tons of steel from this system were consumed, an 8% increase compared to the previous month and a 9% increase compared to the same period last year.

According to VSA, sales of construction steel increased, partly due to the implementation and acceleration of transportation projects such as the North-South expressway, new airport projects, and several other projects.

Retailers, however, believe that the stable steel prices are also a supporting factor for consumer demand. After 18 consecutive price reductions since April, steel prices have remained stagnant for more than a month since the beginning of September. Hoa Phat listed CB240 steel in the Northern market at 13.43 million VND per ton. D10 CB300 steel is priced at 13.74 million VND per ton. These are the lowest prices since 2020.

However, VSA assesses that market demand for steel products generally remains weak and has not improved significantly. In the first nine months of the year, sales of construction steel reached over 7.7 million tons, a 20% decrease compared to the same period in 2022. Exports, in particular, decreased by nearly 13%.

In a recent report, KB Securities Vietnam (KBSC) forecasts that steel prices may continue to remain at low levels until the end of the year. However, selling prices are unlikely to fall much further because steel inventories in China and Vietnam have already reached their lowest levels since the end of 2020.

Although there hasn't been a significant improvement compared to the same period last year, the domestic steel market is gradually showing more positive signs. KBSC expects that domestic steel consumption demand may begin to remain positive from the beginning of 2024 thanks to: relatively low interest rates supporting production and business activities; low steel prices stimulating consumption; policies to alleviate difficulties in the real estate and civil construction markets; and potential from the export market.

Tat Dat

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