According to a recent steel industry report, Rong Viet Securities Corporation (VDSC) stated that steel consumption in 2023 is currently being impacted by challenges in the real estate market, with construction steel experiencing the sharpest decline.

 In the first half of 2023, steel consumption by enterprises remained low, indicating market difficulties. However, businesses have seen growth due to factors such as domestic demand, significantly reduced raw material prices, and reducing average inventory days to minimize risks from raw material price fluctuations.

 VDSC predicts that the steel market will continue to face challenges in the second half of 2023 due to weak construction and industrial activities. Steel demand from overseas markets will also be affected by inflation, macroeconomic policies, and trade interventions.

 Regarding construction steel, VDSC noted that the real estate market is showing signs of recovery in late Q4 as residential projects in Class I cities (Hanoi, Ho Chi Minh City) have started to receive deposits from customers. This is expected to boost construction activities from late 2023 onwards and increase demand for construction materials, including construction steel.

 "Steel demand could potentially skyrocket in 2024, and companies with cost advantages like Hoa Phat Group (HPG) could achieve significant growth in production and consumption of this product," VDSC predicts.

 In the second half of 2023, VDSC estimates that Hoa Phat's construction steel production will reach 1.7 million tons (equivalent to the first half of the year) and increase to 4.6 million tons in 2024 (a 38% increase compared to 2023, with an efficiency rate of about 90%).

 For hot-rolled coils (HRC) and downstream products (galvanized steel, steel pipes), they are still impacted by market challenges but with a smaller decline due to demand from foreign markets (ASEAN and European countries).

 According to the Vietnam Steel Association (VSA), in the first 7 months of the year, hot-rolled coil (HRC) production decreased by 6% compared to the same period last year, reaching 3.8 million tons. HRC sales reached 3.9 million tons, a 1% decrease compared to the same period in 2022, with exports reaching nearly 2 million tons, nearly tripling compared to the same period in 2022.

 As for galvanized steel, in the first 7 months of the year, production reached 2.581 million tons, down 11% compared to the same period in 2022. Sales reached 2.4 million tons, an 11% decrease, with exports reaching 1.3 million tons, down 12% compared to the same period in 2022.

 Global HRC prices are currently in an unstable phase after the COVID-19 pandemic, influenced by global economic downturn and policies of major economies. In the first 6 months of 2023, HRC prices fluctuated between $558 and $692 per ton, posing challenges for steel manufacturers in Vietnam. VDSC anticipates that this volatility may persist in the future.