Steel prices in Vietnam are continuously on a downward trend, currently hovering around 14 million VND per ton (equivalent to $563). Despite the start of the construction season, businesses are still experiencing low consumption output, and new imports are not taking place.
The owner of a construction materials store in Hanoi attributes this situation to the excess of goods imported before Tet (Lunar New Year) and the weakness in demand. Slow production has led many steel manufacturing companies to temporarily halt their furnaces.
According to the latest report from the Vietnam Steel Association (VSA), there was a significant decline in construction steel production and sales in February 2024. Nationwide demand contraction resulted in high stock levels and low selling prices in the domestic market. In February 2024, construction steel sales dropped by 11.7% in the North, 14% in the South, and 16.8% in the Central region. Export, however, increased by 19%, providing some relief amidst regional stagnation.
While the VSA attributes the February demand decline to the Lunar New Year holiday, overall signs of recovery remain elusive. Domestic factories continue to face challenges such as high stock levels, low sales, and financial costs.
Industry representatives predict that 2023 was a tough year for the steel sector, but they anticipate a better market in 2024. However, the realization of this forecast will depend on various factors, including the US Federal Reserve’s interest rate policy and global economic recovery
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