Ho Chi Minh City - From the second half of October 2021, the price of steel materials in general has continuously decreased, in which the price of hot rolled coil has decreased by about 15% as of the beginning of November. This is expected to make Vietnamese steel enterprises suffer. reduce the competitiveness of the selling price of finished products.
Steel production at Nam Kim Steel Company. Illustration: WSDN.
Raw steel prices fall
According to statistics, the raw material is hot-rolled steel coil, from October 16 to November 3, the price on the world market has decreased by about 15%.
Meanwhile, as of November 2, the iron ore futures contract in China fell to 600 yuan/ton (about $93.75). The reason for this sharp drop in prices is said to be improved supply, while demand is not so strong.
Along with that, iron ore futures on the Dalian Commodity Exchange also fell 10%, falling to 565.5 yuan/ton. This is the lowest price since mid-November 2020.
Other products such as rebar used in construction on the Shanghai futures exchange also fell 7.3%, hot rolled coil decreased by 6.5%...
However, according to Ms. Bui Thi Kim - Sales Manager of Yuanta Securities Vietnam Company, the downward price fluctuations as above have certain adverse effects on some Vietnamese steel enterprises.
Specifically, in the past time, due to the high price of raw steel, many steel enterprises have stored enough raw materials from 2020 or early 2021, thus helping them to stabilize production and benefit from good profit margins. than when the inventory price is low, but the selling price of finished products to the market is adjusted up.
But with the ongoing decline in the price of steel materials, because Vietnamese steel enterprises have previously stocked up on high-priced raw materials, it may be negatively affected. Specifically, steel enterprises may have to adjust their selling prices according to the decrease in input materials. Accordingly, profit margin will narrow. If the selling price remains the same, it may reduce competitiveness, especially for export.
No sign of cooling down yet
However, those are analytical calculations. In fact, from October to now, a number of Vietnamese steel enterprises have continuously increased their selling prices from raw steel to finished steel. And until the time when the price of raw steel in the world has cooled down, the price of steel in Vietnam market has not shown any signs of adjustment.
Even, steel prices are still at a high level in the strong uptrend of construction materials in general, from the end of October until now.
There are two factors that explain why the price of steel in particular and construction materials in general in Vietnam market is still increasing strongly, even shockingly. Firstly, although steel materials have cooled down in the world and in China, the supply chain still faces many difficulties, especially in transportation. Second, the demand in the Vietnamese market increased again after October 1, when many localities resumed production and business.
Another important factor is public investment as well as a support package of VND 800,000 billion under the economic recovery and development program after the COVID-19 epidemic, proposed by the Ministry of Planning and Investment. In the economic recovery trend of the last months of 2021 and especially 2022, the demand for construction materials including steel will remain high.
A recent report from VIRAC Research also shows that the price of construction materials such as steel and cement is forecast to continue to increase in the year to 2022.
In fact, the price of construction steel on the Shanghai (China) trading floor has also increased again on the morning of November 8. The price movement of steel in general and construction materials in particular in the coming time is forecasted to have unpredictable factors.
According to statistics, the raw material is hot-rolled steel coil, from October 16 to November 3, the price on the world market has decreased by about 15%.
Meanwhile, as of November 2, the iron ore futures contract in China fell to 600 yuan/ton (about $93.75). The reason for this sharp drop in prices is said to be improved supply, while demand is not so strong.
Along with that, iron ore futures on the Dalian Commodity Exchange also fell 10%, falling to 565.5 yuan/ton. This is the lowest price since mid-November 2020.
Other products such as rebar used in construction on the Shanghai futures exchange also fell 7.3%, hot rolled coil decreased by 6.5%...
However, according to Ms. Bui Thi Kim - Sales Manager of Yuanta Securities Vietnam Company, the downward price fluctuations as above have certain adverse effects on some Vietnamese steel enterprises.
Specifically, in the past time, due to the high price of raw steel, many steel enterprises have stored enough raw materials from 2020 or early 2021, thus helping them to stabilize production and benefit from good profit margins. than when the inventory price is low, but the selling price of finished products to the market is adjusted up.
But with the ongoing decline in the price of steel materials, because Vietnamese steel enterprises have previously stocked up on high-priced raw materials, it may be negatively affected. Specifically, steel enterprises may have to adjust their selling prices according to the decrease in input materials. Accordingly, profit margin will narrow. If the selling price remains the same, it may reduce competitiveness, especially for export.
No sign of cooling down yet
However, those are analytical calculations. In fact, from October to now, a number of Vietnamese steel enterprises have continuously increased their selling prices from raw steel to finished steel. And until the time when the price of raw steel in the world has cooled down, the price of steel in Vietnam market has not shown any signs of adjustment.
Even, steel prices are still at a high level in the strong uptrend of construction materials in general, from the end of October until now.
There are two factors that explain why the price of steel in particular and construction materials in general in Vietnam market is still increasing strongly, even shockingly. Firstly, although steel materials have cooled down in the world and in China, the supply chain still faces many difficulties, especially in transportation. Second, the demand in the Vietnamese market increased again after October 1, when many localities resumed production and business.
Another important factor is public investment as well as a support package of VND 800,000 billion under the economic recovery and development program after the COVID-19 epidemic, proposed by the Ministry of Planning and Investment. In the economic recovery trend of the last months of 2021 and especially 2022, the demand for construction materials including steel will remain high.
A recent report from VIRAC Research also shows that the price of construction materials such as steel and cement is forecast to continue to increase in the year to 2022.
In fact, the price of construction steel on the Shanghai (China) trading floor has also increased again on the morning of November 8. The price movement of steel in general and construction materials in particular in the coming time is forecasted to have unpredictable factors.
The Lam/Laodong.vn
Link: https://baoxaydung.com.vn/ganh-chiu-gia-nguyen-lieu-dau-vao-cao-nganh-thep-giam-loi-the-canh-tranh-319146.html
