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    The steel market has formed a new price level

    After a period of unusual price fever (from December 2020), currently, the steel market has stabilized. Steel products have formed a new price “ground”.

    In order to recover the economy due to the impact of the Covid-19 epidemic, governments around the world have issued many economic stimulus packages of tens of trillions of dollars, making the prices of primary materials of the world economy less expensive. (petroleum price, raw material price, material transportation price) increased.

    After a period of unusual price fever (from December 2020), currently, the steel market has stabilized. The price of steel products has formed a new “ground” according to objective reality.

    Experts estimate that the situation of production, supply and demand of steel products in 2021 will continue to develop stably. Ordinary construction steel products meet enough steel demand for the domestic market and tend to grow slower than in the first 6 months of the year. Hot rolled coil (HRC) will still be imported because the domestic supply can only meet more than 50% of the domestic demand.

    It is forecasted that by the end of 2021, the price of finished steel (traded in the Chinese market) will decrease to the price of 696.76 USD/ton, the price of iron ore 62% (delivered at the port of Tianjin, China) will decrease to the price of 696.76 USD/ton. $200/ton.

    Steel market under the impact of input material prices

    According to statistics, the amount of raw materials for steel production of enterprises is mainly imported (except for the fact that Thai Nguyen Iron and Steel Joint Stock Company of Vietnam Steel Corporation uses self-exploited iron ore materials with a low output of about approx. 300,000 tons/year), the amount of iron ore and scrap steel for steel production in 2021 is expected to increase higher than that of 2020.

    Based on financial invoices provided by steel production units, the prices of imported raw materials of steel factories have increased. In which, iron ore price in May 2021 increased 2.4 times compared to February 2020 price (ore price increased from 86 USD/ton to 206 USD/ton) and increased 32% compared to December 2020 ( ore price increased from 156 USD/ton to 206 USD/ton); Scrap steel price in May 2021 increased by 1.9 times compared to February 2020 price (ore price increased from 270 USD/ton to 512 USD/ton) and increased by 18% compared to December 2020 (ore price increased from 435 USD/ton to 512 USD/ton).

    However, the price of iron ore mined at Thai Nguyen Iron and Steel Joint Stock Company is less volatile, the price of iron ore in May 2021 compared to February 2020 only increased by 8%.

    According to reports of steel manufacturers, the selling price of steel products in the first 5 months of 2021 increased compared to 2020 due to fluctuations in input material prices. However, the increase in product sales is still lower than the increase in input prices.

    Specifically, steel billet price in May 2021 increased by 62% compared to the price in February 2020 (from 9,433,697 VND/ton to 15,278,360 VND/ton) and increased 41% compared to December 2020 (from VND 9,433,697/ton to VND 15,278,360/ton) VND 10,800,000/ton to VND 15,278,360/ton).

    As for construction steel price, steel price in May 2021 increased by 49% compared to February 2020 price (from 11,340,608 VND/ton to 16,869,341 VND/ton) and increased by 30 compared to December 2020 % (from 12,944,499 VND/ton to 16,869,341 VND/ton).

    For HRC hot rolled coil price: HRC steel price in May 2021 increased by 94% compared to February 2020 price (from 9,000,000 VND/ton to 17,500,000 VND/ton) and increased compared to December last year 2020 is 48% (from 11,800,000 VND/ton to 17,500,000 VND/ton).

    Steel market forecast at the end of the ye

    ar

    According to a report of the Vietnam Steel Association, in the first 6 months of 2021, Vietnam’s steel production reached more than 15.9 million tons of all kinds, up 37% over the same period in 2020 (in which, steel billet reached 11, 1 million tons, up 29% over the same period in 2020); Consumption of steel products in the first 6 months of 2021 reached more than 14.05 million tons, up 35% over the same period in 2020 (of which, steel billet 10.08 million tons, up 29% over the same period in 2020).

    Regarding steel import and export activities, statistics show that, in the first 5 months of 2021, the whole country imported 5.97 million tons of steel of all kinds, up 8.4% over the same period with an import value of over 4 million tons. 6 billion USD; In the first 5 months of 2021, the whole country exported 4.8 million tons of steel of all kinds, up 28% over the same period with an export value of 3.6 billion USD.

    Regarding the production capacity of enterprises, according to a report of the Department of Industry, the Ministry of Industry and Trade, the situation of steel production in 2020 and expected in 2021 of steel production units is stable and has a high growth rate in Vietnam. enterprises with new investment projects into production (such as Hoa Phat Group, Nghi Son Steel Joint Stock Company), for steel production enterprises without new investment projects, stable production ( Vietnam Steel Corporation; Minh Ngoc Trading and Production Company Limited.

    In particular, for billet products: Hoa Phat Group and Nghi Son Steel Joint Stock Company in 2021 are expected to have a large growth compared to 2020. Specifically, Hoa Phat Group increased by about 38%, the Company Nghi Son Steel shares increased by 44%, Vietnam Steel Corporation increased by 7%.

    As for construction steel, it is estimated that Hoa Phat Group’s construction steel production output in 2021 will increase by about 42% compared to 2020, Nghi Son Steel Joint Stock Company will increase about 3 times compared to 2020 (according to reported by the Company), Vietnam Steel Corporation with an output equivalent to 2020.

    For hot rolled coil (HRC), in 2021, Hoa Phat Group is expected to produce 2,880,000 tons, an increase of more than four times compared to 2020 (in 2020, the production line of hot rolled coil (HRC) in Hoa Phat Dung Quat Iron and Steel Production Complex has just come into production and has produced 686,433 tons).

    According to the reports of the units, in the first 5 months of 2021, steel consumption is stable and has a high growth rate, providing enough for the market’s demand for construction steel and galvanized steel products of all kinds. .

    For export steel products: Hoa Phat Group plans to reduce export steel billet output to serve domestic processing factories (expected to export 730,000 tons in 2021, down 44% compared to 2020).

    However, in order to recover the economy due to the impact of the Covid-19 epidemic, governments around the world have issued many economic stimulus packages of tens of trillions of dollars, making the prices of primary materials of the economy less expensive. the world economy (oil prices, raw material prices, material transportation costs) increased.

    After a period of unusual price fever (from December 2020), currently, the steel market has stabilized. The price of steel products has formed a new “ground” according to objective reality.

    According to forecasts, the situation of production, supply – demand of steel products in 2021 will continue to develop stably. Ordinary construction steel products meet enough steel demand for the domestic market and tend to grow slower than in the first 6 months of the year. Hot rolled coil (HRC) will still be imported because the domestic supply can only meet more than 50% of the domestic demand.

    Tradingeconomics.com forecasts that by the end of 2021, the price of finished steel (traded in the Chinese market) will decrease to the price of 696.76 USD/ton, the price of iron ore 62% (delivered at the port of Tianjin, China). will decrease to 200 USD/ton.

    Source: Ministry of Industry and Trade of the Socialist Republic of Vietnam

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