The Land Law, which will come into force in August 2024, is expected to boost steel consumption. Consumption of steel pipes increased by 26% to 191 thousand tons in April-May 2024, indicating a recovery in the domestic market.
Production of steel consumption is expected to increase by 15% and 8% in 2024 and 2025, respectively. In addition, imports of galvanized steel products from China and Korea are increasing. Since 2023, China and Korea's share has risen from 53% to 80%. If anti-dumping measures are approved, major players in the local industry could benefit from this situation.
The export production of galvanized steel increased by 53 in the first 5 months of 2024 compared to the same period last year, reaching 1.3 million tons. The extension of safeguard measures for steel products by the European Commission will support the recovery of steel prices in the European market and Vietnam's export opportunities.
The decline in Chinese steel prices due to low consumption expectations and the 27% increase in inventories triggered a capacity expansion across the industry. However, rising domestic demand and competition with Chinese steel prices will support steel prices. The decline in input costs will also improve the gross profit margins of steel manufacturers.
In general, the growth prospects of the steel sector are viewed positively with the recovery of domestic demand from the second half of 2024, the commissioning of new factories and the improvement of the Chinese real estate market. Experts predict that the steel sector will enter a slow recovery process from 2025.
Comments
No comment yet.