Construction steel prices week May 20-May 24, 2024

It is basically stable, but market sentiment is getting weaker when information about factory subsidies and billet prices appears to decrease slightly.

Early last week, the construction steel market recorded a second increase in rolled steel from some steel mills, with Viet Duc's third increase. The increase was still 100 VND/kg, similar to previous increases. Rebar prices basically have not had any new adjustments yet. After this increase, factories kept prices stable until the end of this week.

Notably, at the beginning of this week, news appeared on the market that factories subsidize construction steel prices, ranging from 50-150 VND/kg, depending on the factory. This move shows that factories are quite cautious in adjusting prices, and it may be difficult for prices to increase in the short term even though consumption is still positive. In fact, demand at the end user side is still quite weak. Therefore, inventory on the market is quite high, which is also a reason why factories and traders cautiously adjust prices.

Preliminary data on construction steel consumption output of 10 large factories in the North from May 1-19, 2024 shows that the total output is estimated at 406,100 tons. Among them, the number 1 position belongs to Hoa Phat with about 240,000 tons, in the 2nd position is Tisco with about 45,000 tons, the 3rd place is Viet Duc (VGS) with 32,000 tons. Consumption in the first 19 days of May 2024 is quite similar to the same period in April 2024, but nearly doubled compared to the same period in May 2023.

On the other hand, billet and scrap prices fluctuated little this week, but market sentiment was not too good. For scrap, most large factories adjusted downwards at the end of last week. By the end of this week, Shengli also adjusted down by 100 VND/kg. Some other small factories also lowered both scrap and billet prices. Therefore, billet prices this weekend also decreased slightly by 50-100 VND/kg, but transactions improved slightly when many factories were importing goods for production. However, the possibility of billet prices continuing to increase is not high.

In general, with the current situation, expectations of price increases in the market have decreased. According to many traders, it is possible that factories may continue to subsidize prices to keep prices stable in the context of demand pressure showing signs of increasing again.

Overview of Vietnam Iron and Steel market week 21/2024 (May 20 - May 24):

Imported scrap market:

Unlike previous weeks, the imported scrap market this week is gradually weakening. The number of offers is less, transactions also appear less, causing downward pressure on prices to be higher.

Domestic scrap market:

The domestic scrap market was almost stable in the first half of the week, and at the end of the week, information was recorded by Shengli, Da Nang Steel and ASEAN Steel reducing scrap prices. Traders still keep prices moving sideways.

Steel billet import and export market:

Weak demand makes it difficult for the Southeast Asian embryo market to prosper, affecting Vietnam's export market. Information about transactions appeared, but prices were mostly low, although the asking price increased slightly.

Domestic steel billet market:

At the end of the week, factories showed signs of gathering embryos, so the market gradually recorded some news about successful transactions. However, the transaction price was low, so sellers at the weekend slightly lowered the asking price after keeping it stable in the previous days.

Imported HRC market:

Influenced by strong fluctuations in the futures market, HRC offering prices from China to Vietnam also fluctuated quite strongly. There are also offers from Japan and India, but not many.

Domestic HRC market:

The highlight is that Formosa Ha Tinh offers additional discounts with HRC, but applies specifically to each order. This news combined with the slowdown in downstream growth has caused the domestic HRC price to not adjust even though the futures price increased sharply.

Construction steel export market:

Both China and Southeast Asia markets increased this week, but demand did not improve much. Vietnam's export steel rebar offering price is therefore almost flat.

Domestic construction steel market:

Construction steel consumption still shows positivity, but discussions about price increases gradually subsided, when there was information that factories supported construction steel this week.

Steel pipe and box market:

There are still some factories announcing price increases, even in early June. However, due to weak demand and flat HRC prices, traders basically kept prices stable.

Corrugated iron market:

Like steel pipes and boxes, the corrugated iron market still receives price increase notices from some factories but in small quantities, some steel mills even extend the price increase period. Market sentiment is weaker, traders also keep steel prices stable.

Weak demand is still the bottleneck in the market, causing expectations for price improvement to gradually diminish. Prices of finished steel products did not increase or increased slowly, on the contrary, prices of raw materials and semi-finished products moved sideways or decreased slightly. Price adjustments are becoming more and more cautious. Notably, the export market recorded a number of successful transactions, so it is possible that Vietnamese sellers will continue to promote exports in the near future.