The Vietnamese steel industry has shown signs of recovery, with an increase in sales and production, especially in September 2023. Although the year started slow, companies like Hoa Phat Group and VNSteel reported high sales output recently. The focus is now shifting to 2024, where the industry, backed by ongoing transportation and construction projects, is expected to flourish.
The year 2023 has been a mixed bag for Vietnam's steel industry. However, positive changes have begun to surface, particularly in September. According to the Vietnam Steel Association (VSA), sales volume of construction steel reached almost 959,000 metric tons, up 9% from the previous month and 4% year-on-year.
Hoa Phat Group, one of the major steel producers, recorded their highest sales output this year. Sales reached 596,000 metric tons, a 7% increase compared to the previous month. Among these, construction steel alone accounted for 352,000 metric tons, marking a 15% rise month-on-month.
Despite the high figures, the general market demand for steel products remains weak. Nguyen Viet Thang, the general director of Hoa Phat, attributes the slight improvement in construction steel to ongoing transportation projects like the North-South Expressway and new airport constructions.
Steel prices have stabilized at around $565-580 per ton after 18 consecutive reductions since April. This has also helped support consumer demand. The VSA believes that this stability and the ongoing transportation projects in the country are responsible for the slight boost in steel sales.
Though construction steel production in September was 876,000 metric tons, down 6% on-month and 9% year-on-year, the figures for the first nine months of the year indicate a 21.6% decrease in construction steel production and a 20% decline in sales compared to the same period last year.
Many analysts predict a better future for the steel industry in 2024. The World Steel Association forecasts global steel demand to increase by 1.8% in 2023 and reach over 1.8 billion metric tons. In 2024, this demand is expected to rise by 1.9% to 1.85 billion metric tons, largely driven by emerging markets in Asia.
Despite a challenging start, Vietnam's steel industry is showing promising signs of recovery. With ongoing and upcoming construction projects and a more stabilized price, the industry sets its sights on a more prosperous 2024.