Experts predict a rebound for the steel industry in 2024, driven by new government policies and revisions to the Land Law. These changes are expected to invigorate the real estate and construction markets, thereby increasing demand for steel.
Despite a slow year marred by falling steel prices, there's a silver lining on the horizon for the steel industry. Come 2024, the sector is expected to bounce back, thanks to supportive government policies and a revitalized Land Law. These elements are set to give a much-needed boost to the real estate and construction sectors, which in turn will drive up demand for steel.
According to the Vietnam Steel Association (VSA), although steel manufacturing dropped year-on-year, it saw a monthly increase of 2.41% in September, with a total output of nearly 2.34 million metric tons. Steel consumption also rose to 2.2 million metric tons, showing a 4.69% month-on-month increase. These numbers signify that the government's moves to unclog economic bottlenecks from January to September are starting to pay off.
Companies within the steel industry are already feeling the ripple effects of this positive trend. For instance, Hoa Phat Group's steel consumption reached 596,000 metric tons in September, a 7% increase compared to the previous month. Vietnam Steel Corporation also hit a new high this year by selling 268,000 metric tons of steel in September.
However, the VSA advises caution, stating that a robust recovery is not expected until the first quarter of 2024. A sluggish real estate market and intense competition from China have kept steel prices low, at around $548.56 per metric ton.
Industry expert Nguyen Van Sua emphasized that a depressed real estate market has been a key factor in reduced steel demand. Furthermore, cheaper steel imports from China are exerting downward pressure on domestic steel prices.
To turn the tide, the quick implementation of real estate and public investment projects is crucial, says Sua. A more vibrant real estate market will naturally drive up demand for steel. VNDirect Securities Corporation echoes this sentiment, asserting that the industry will take off in 2024, particularly due to changes in the Land Law that will benefit homebuyers.
Lastly, Pham Quang Anh, Director of Mercantile Exchange of Vietnam, posits that government efforts to speed up public capital disbursement will stimulate demand further, thereby invigorating domestic business and production activities.
The future looks promising for Vietnam's steel industry, with experts anticipating a strong recovery by 2024. Key to this revival will be government interventions and a rejuvenated real estate market, which are expected to boost steel demand. Companies within the sector should gear up for an upswing, making the necessary preparations to capitalize on the forthcoming boom.
