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Tag: steel

  • Hoa Phat steel sales fall by 42% in October

    Hoa Phat steel sales fall by 42% in October

    Hoa Phat Group’s sales plummeted by 42% year-on-year in October to 492,000 tons as domestic and global steel demand continued to fall.

    According to monthly data from Vietnam’s largest steel company, this is its lowest sales volume since February 2021.

    Construction steel sales fell by 45% year-on-year to 210,000 tons.

    Hot-rolled coil steel sales however rose 30% to 267,000 tons as the company was able to export large volumes to Indonesia and Malaysia.

    Several media reports have said the company is set to shut down four blast furnaces starting this month as market demand remains sluggish.

    HPG shares have fallen by nearly 30% this year to around VND13,800.

    Analysts at SSI Securities said in a recent note that weakening steel demand would remain a challenge for the company.

  • Steelmakers report biggest-ever losses

    Steelmakers report biggest-ever losses

    Leading steelmakers in the country have reported the biggest-ever Q3 losses in amidst low sales, rapidly falling prices, and high inventories.

    The nation’s biggest steelmaker, Hoa Phat, incurred a negative after-tax return of VND1.79 trillion ($72 million), the first loss it has reported in 13 years. This is also the third consecutive quarter that its revenues have dropped, down 12% over the same period last year and down nearly 8% against the previous quarter.

    Nam Kim reported Q3 losses of over VND400 billion, a record high, with revenues down nearly 1.7 times over the same period last year.

    Steelmaker Hoa Sen racked up losses of VND887 billion in the last quarter of the 2021-2022 fiscal year, compared with a profit of more than VND940 billion in the same period last fiscal year. It reported a loss for the first time since the fourth quarter of the 2017-2018 fiscal year.

    Companies under the Vietnam Steel Corporation (VnSteel) also posted record losses or minuscule profits in the third quarter.

    Thu Duc Steel saw its biggest-ever Q3 loss of VND22 billion, nearly 37% higher than the same period last year; and Vicasa Steel reported its biggest loss since the third quarter of 2020.

    Thai Nguyen Steel and Ho Chi Minh City Metal incurred losses of VND25 billion and VND12 billion. Meanwhile, two other VnSteel affiliates, Melin Steel and Cao Bang Steel, gained very small profits, down 95% and 99%, respectively, against the third quarter of last year.

    Like steelmakers, many steel distributors and traders also suffered losses, with the SMC Trading Investment Joint Stock Company reporting its biggest-ever quarterly loss of nearly VND220 billion, compared with a profit of nearly VND130 billion in the same period last year.

    Steel companies said they faced low domestic sales and export turnovers, a rapid decline in product prices, and high inventories in the third quarter. According to Vicasa Steel, the Vietnamese steel industry was affected by the Russia-Ukraine conflict, China’s “zero Covid” policy, and global inflation.

    Higher input costs, credit tightening, high lending interest rates, and fluctuating exchange rates were other contributing factors. Hoa Phat said coal prices had trebled.

    From mid-May to late August, steel prices declined 15 consecutive times from around VND19 million per ton to VND14.5-15 million. After a slight increase at the beginning of September, the prices fell twice to some VND14 million per ton, equivalent to the levels in late 2020.

    According to the Vietnam Steel Association, the country’s finished steel output was 2.4 million tons in September, but sales were only 1.99 million tons. In the first nine months, it had steel inventories of some 1.6 million tons.

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  • Steel prices 20% lower than in May after falling again

    Steel prices 20% lower than in May after falling again

    Steel prices have dropped for a 14th time in a row since mid-May with the total decline adding up to nearly 20%.

    Many producers like Hoa Phat Group, Viet Nhat, Viet Y, and Kyoei cut prices by VND300,000-500,000 ($12.81-21.36) a ton this week.

    Prices have fallen by around VND3.5 million a ton in the last three months to VND14.4-15.7 million though they remain higher than last year’s VND12.5 million.

    The relentless fall comes amid weaker demand and falling production costs.

    Steel output last month was 2.25 million tons while demand was for 1.99 million tons, both down 13% year-on-year.

    Demand had fallen by 7.3% in the first six months of the year as the property market slowed on credit tightening by banks and falling demand in China.

    Demand is unlikely to return in Q3 since it is the construction low season, and with inventories being high as well, prices would not go back up, BIDV Securities (BSC) said.

    Mirae Asset Securities made a similar forecast citing high inflation. Steel output this year would fall by 10% to around 27 million tons, it added.

    But BSC said steelmakers’ profit margins would increase thanks to falling input prices.

    Data from the Vietnam Steel Association showed prices of iron ore 62% FE, a key raw material for making steel, have fallen by almost half since early May.

    Coking coal, steel scrap and hot-rolled coil have become 35-60% cheaper.

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  • Steel prices drop 8th time in a rowd

    Steel prices drop 8th time in a rowd

    Steel prices have dropped for the eighth time in a row since mid-May with a total decline of nearly 13 percent.

    Biggest steelmaker Hoa Phat Group brought its prices of rolled steel and rebar steel down for the eighth time last weekend, bring prices down by VND2.4 million ($102.61) since mid-May.

    Other steelmakers like Viet Nhat, Viet Y, Kyoei and Pomina have also brought down prices in the last two months.

    VND million per tonne (VND1 million = $42.75)Hoa Phat steel pricesCB240 steelD10 CB300 steelMay 1May 17May 27Jun 1JunJun 19Jun 27Jul 81617181920May 27● CB240 steel: 17.64

    The decline of steel prices came amid weaker demand and falling input prices.

    Domestic steel demand in the first five months dropped by 6 percent year-on-year, according to stock brokerage SSI Research.

    Steel production in April and May fell by 32 percent year-on-year, it added.

    SSI Research said the rising prices of construction materials have delayed infrastructure projects, which could be part of the reason why steel prices have dropped.

    Tightened policy on property development has also affected steel prices, it added.

    Hot-rolled coil prices have dropped by 15-20 percent in China and the U.S. in the last three months due to declining construction and manufacturing activities.

    Prices of coke, one of the input materials for steel, have dropped by 36 percent from its peak in March, while prices of iron ore have fallen 13 percent in the last three months, SSI Research said.

    Another brokerage, VNDirect, expects steel consumption to recover next year thanks to public investment and recovery of the residential property market.

  • Steel stocks belie expectations, in deep slump

    Steel stocks belie expectations, in deep slump

    The Vietnamese steel industry was expected to benefit from the Russia-Ukraine crisis, but stocks of companies have been plunging due to rising input costs and declining demand.

    The shares of industry leader Hoa Phat Group fell Thursday to a 14-month low. HPG has dropped by over 27 percent this year as against a 14 percent fall for the VN-Index.

    Hoa Sen Group’s share price fell to its lowest in 15 months in May and has barely risen since. It has lost 42 percent this year. Nam Kim Steel is down 23 percent and Pomina Steel Corp, 40 percent.

    After Russia launched military operations in Ukraine in February, some top Ukrainian steel manufacturers said they would have to cut production to a minimum this year, while Russian producers face an embargo from western countries.

    The two together exported 57 million tons of steel last year, or 3.1 percent of global demand, and there was an expectation that Vietnamese manufacturers would fill the gap.

    Stock brokerage VNDirect said in March, “We believe that top Vietnamese exporters have the opportunity to increase their production in the near future.”

    Steel stocks soared in February, with NKG rising by 60 percent that month even as the VN-Index inched up by less than 1 percent.

    HSG rose by 36 percent, POM by 21 percent and HPG by 17 percent.

    But after reaching a new peak of nearly US$1,600 a ton in early April, steel prices have dropped to around $1,160 now.

    Analysts blamed this on slower than expected economic recovery and the resultant drag on demand.

    In its latest forecast, the European Steel Association said consumption could fall by 1.9 percent this year instead of rising by 3.2 percent as it projected in February.

    This is because high energy prices, disruptions in the supply chain and the Russia-Ukraine crisis could lead to a slump in demand for cars and consumer electronics, and lockdowns in China’s major cities are likely to have negative impacts on the global economy, it said.

    In a double whammy, production costs are surging.

    Analysts at KIS Vietnam Securities expect the rising costs to drag Hoa Phat Group’s profit margin down by 4.4 percentage points this year to 23 percent.

    In the first quarter its pre-tax profits were nearly 14 percent lower than in the second quarter last year when steel demand was booming.

    Hoa Sen saw profits decline for a fourth quarter in a row, while Nam Kim’s fell by 40 percent from the second quarter of last year.

    “Shareholders will see dreadful earnings figures in the second quarter,” Hoa Phat chairman Tran Dinh Long said at the company’s annual general meeting on May 24.

    HPG dived by 5 percent that day.

    But analysts at SSI Research expect the steel industry to begin recovering when China eases its Covid restrictions.

  • Contractors fret as Vietnam steel prices scale new peak

    Contractors fret as Vietnam steel prices scale new peak

    With domestic steel prices up nearly 8 percent in 10 days, contractors are caught in a dilemma: continue work and suffer losses or suspend work and suffer fines. The Vietnam Steel Corporation (VNSTEEL) has upped its prices by 7.6 percent for both rolled and bar products.

    Its rolled steel prices reached VND18.57 million ($807) per ton, which is higher than the historic peak of VND18.3 million reached last year.

    Prices have been rising on the back of global price rises. Steelmaker Hoa Phat Group has increased its D10 bar prices to VND18.43 million per ton Mar. 11 from Mar. 1’s VND17.42 million.

    Friday’s was the third hike within over a week without a downward adjustment in between.

    The Vietnam Association of Construction Contractors (VACC) has warned that high construction steel prices will drag the industry down.

    It estimates that steel makes up 18-20 percent of the costs of building high-rise apartments, and the proportion is even higher for bridges and roads.

    Prices of other construction materials have also gone up. The association has asked the authorities to take price stabilization measures, but this has not happened yet.

    “The construction industry makes up for 8-9 percent of Vietnam’s GDP, thus any disruption can affect Vietnam’s growth target,” Nguyen Quoc Hiep, VACC chairman said.

    Many contractors are in a dilemma of whether to keep construction going at losses because of high material prices, or stop working and be penalized for slow progress, he said.

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  • Steel prices rise 5 pct, nears historic peak

    Steel prices rise 5 pct, nears historic peak

    Steel prices in Vietnam have increased by 2-5 percent in the last two weeks on the back of global price increases and are not far away from reaching last year’s peak.

    The Thai Nguyen Iron and Steel Jsc has increased its rolled steel prices to VND17.3-17.6 million ($759-772) per tonne, up by around 2 percent from the first week of February.

    The Hoa Phat Group, meanwhile, has upped prices by 3.7-5 percent to VND17.15 million per ton, which is just 4.6 percent away from the previous historic peak of VND18.3 million last year.

    Some industry insiders anticipate that prices will rise even higher.

    “There could be two or three increases this year, pushing prices up by VND1 million”, said Ngoc, a steel distributor in Hanoi.

    Vietnam’s steel prices have been rising up as China, the world’s biggest exporter and manufacturer, pushed prices up by nearly 6 percent two days ago to a five-month high of $756 per ton.

    The shortage of supply and rising demand as countries push recovery from Covid-19 is said to be the reason for the price increase.

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  • Steel exports surge 130 pct as global demand shoots up

    Steel exports surge 130 pct as global demand shoots up

    Steel exports rose by nearly 130 percent in the first 11 months of this year to US$10.8 billion, according to the Vietnam Steel Association.

    Hoa Phat exported 914,000 tons of finished construction steel products, a year-on-year rise of 90 percent. It plans to export over one million tons, double the volume it shipped last year.

    The association expected exports to be robust this month due to rising global demand and a temporary shortage in China.

    Vietcombank Securities Company explained that China is gradually reducing its steel exports.

    The association said Vietnam has a production capacity of around 24 million tons a year, and output this year is expected to reach 21.2 million tons, enough to fully meet domestic and export needs.

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  • Vietnam Steel exports surge

    Vietnam Steel exports surge

    Steel exports increased by 43.4 percent year-on-year in the first eight months to 8.54 million tons, and were worth US$7.1 billion, a 127 percent rise.

    In August, for a second month in a row, the billion-dollar mark was breached, with the value of shipments increasing 2.5-fold to nearly $1.5 billion.

    The main export markets were Southeast Asia, which bought 2.7 million tons and China (1.8 million tons).

    Exports to the E.U. and U.S. skyrocketed 7.5-fold and four-fold from 12 months earlier as demand there continued to soar.

    Exports to Europe also benefited from the EU-Vietnam Free Trade Agreement, with many companies taking advantage of lower tariffs.

    According to the Vietnam Steel Association, the country’s production capacity is around 24 million tons a year. Output this year is expected to reach 21.2 million tons, enough to meet domestic and export needs.

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  • Steelmakers protest proposed tariff adjustments

    Steelmakers protest proposed tariff adjustments

    The Vietnam Steel Association (VSA) has protested the latest proposed adjustments to tariff rates on steel products saying they will hurt domestic manufacturers.

    Under the proposal made by the Ministry of Finance, export tariff for billets would rise from zero percent to 5 percent, while the most favored nation (MFN) import rates for certain steel products would be reduced to 10 percent from 15 percent.

    The proposal is aimed at cutting the prices of construction steel, which have shot up 40 to 50 percent compared to early 2020.

    VSA has protested the proposal, arguing that the prices were impacted by the global raw materials market rather than the current tariff policies, or any trade remedies applied to steel products.

    VSA chairman Nghiem Xuan Da noted that most of the input materials for steel production are imported. A price hike in these materials will immediately affect domestic manufacturers, causing output prices to skyrocket.

    However, global steel prices have declined since late May.

    Vietnam reaped steel export earnings of $4.9 billion in the first half of this year. Meanwhile, it produced 16 million tons of steel, up 37 percent over the same period last year.

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  • Construction steel prices fall further

    Construction steel prices fall further

    The price of Vietnamese construction steel dropped to below VND17 million ($732) per ton, but contractors said this was still high.

    The Viet Duc Steel Company said it has lowered prices of steel bars and coils by VND300,000 per ton from July 1, while the Thai Nguyen Iron & Steel Joint Stock Corporation reduced the prices of steel coils by VND300,000 to around VND16.7 million per ton.

    The prices of a ton of steel coils produced by the Hoa Phat Group and the Vietnam-Italy Steel Joint Stock Company are VND300,000-600,000 lower than in June.

    The decline in prices of construction steel in the Vietnamese market over the past few weeks has been attributed to lower prices of steel billets in the world market.

    The most-traded steel rebar on the Shanghai Futures Exchange, for October delivery, closed down 2.9 percent at 5,014 yuan ($774.60) a ton.

    Another contributing factor is weaker demand for construction materials in some localities that have already entered the rainy season.

    However, many construction contractors said the prices of domestic steel products were still high, cutting deep into their profit, leaving them with smaller profits. Steel costs account for 10-30 percent of a construction project.

    Vietnam produced nearly 12 million tons of steel products of different kinds in the first five months of this year, a year-on-year rise of more than 38 percent while exporting nearly 2.8 million tons, up 80 percent.

    The country exported 1.1 million tons of steel to China in the five-month period, twice that of last year, according to the General Department of Vietnam Customs.

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  • Vietnam seeks to stabilize steel prices

    Vietnam seeks to stabilize steel prices

    The government has asked steelmakers to implement several steps to control rising steel prices that are hurting construction contractors.

    Deputy Prime Minister Le Minh Khai has asked the Ministry of Industry and Trade to push for increased domestic steel production towards stabilizing prices. Steel production in Q1 reached 7.6 million tons, a year-on-year increase of 34 percent, according to the Vietnam Steel Association (VSA)

    He also said the export of steel should be lowered to ensure that local demand is met. Steel exports in Q1 rose 59.5 percent year-on-year to 1.6 million tons, according to the VSA.

    Meanwhile, VSA has asked its members to prioritize using raw materials for steel production from local producers instead of imported them at high prices so that their operating expenses and selling prices are lowered.

    Steel prices in Vietnam have experienced a 40-50 percent surge since the beginning of the year, according to the VSA, forcing construction contractors to suffer losses and turn down contracts.

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  • Steel makers see profits skyrocket

    Steel makers see profits skyrocket

    Steel manufacturers in Vietnam have seen profits increase as much 30-40 times in the first quarter as demand surges and prices rise.

    In Hanoi, Me Lin Steel saw a post-tax profit surge 41 times year-on-year to VND15.5 billion ($672 million), as steel prices started rising towards the end of last year and the company managed to cut costs.

    Tien Len Group in the southern province of Dong Nai saw its post-tax profit rise 30 times year-on-year to over VND120 billion, meeting half of this year’s target.

    Meanwhile, the Thai Nguyen Iron and Steel (TISCO) company in the northern province of Thai Nguyen, which has been reporting repeated losses, posted its highest first-quarter profit in the last three years at VND44 billion.

    The Hoa Phat Group has not released its profit figures, but saw March sales hitting a new record one million tons, the highest monthly figure ever.

    The profit surge has happened as steel prices skyrocket due to limited availability of materials from China and India even as the global economy recovers from Covid-19 impacts.

    Material prices have risen 30-40 percent from early March and are expected to continue rising until the end of the third quarter, according to the Vietnam Steel Association.

    Analysts with leading brokerage SSI Securities Corporation have said that local steel producers are benefiting from the recovery of the real estate market, foreign direct investment and public spending on infrastructure.

    Some big companies, like HPG of steelmaker Hoa Phat Group, can take advantage of the low supply of hot-rolled coil steel and do even better next year, they said.

  • Steel industry expected to recover this year

    Steel industry expected to recover this year

    Vietnam’s steel industry is expected to recover this year with rising export orders, thanks to improved global demand and surging domestic consumption.

    Market leader Hoa Phat Group last month exported over 12,000 tonnes of products, mostly cold-galvanized steel, to North and South America.

    This followed an export of 10,000 tonnes in January to Belgium and Spain.

    The company targets producing 300,000-400,000 tonnes of steel products this year, 30-40 percent of which are likely to be exported.

    Its competitor Hoa Sen Group last month set a new export record of 121,000 tonnes of galvanized steel worth more than $100 million. The group has a network of over 85 countries and territories, with main markets being the U.S, Mexico, Europe, and Southeast Asia.

    Vietnam’s steel industry is expected to see growth of 5-6 percent this year, with global demand set to rise by 4.1 percent thanks to a recovery in developed markets, according to the Vietnam Steel Association (VSA).

    Other drivers for growth include expectations of rising public investment in infrastructure, the recovery of the real estate market and more foreign direct investment, said VSA deputy chairman Trinh Khoi Nguyen.

    The industry started 2021 strongly, with a 61 percent year-on-year rise in production volume to 2.65 million tonnes.

    Domestic sales in the period rose 55 percent to 2.12 million tonnes, while exports rose 53 percent in value to $553 million.

    These figures indicate robust recovery prospects this year after VSA saw half of its members reporting plunging revenues last year, especially in the first and second quarter, due to Covid-19 impacts.

    However, trade officials have warned that rising safeguard measures could hurt the industry.

    Last month, Indonesia imposed an anti-dumping duty of 3.01-49.2 percent on Vietnam cold steel sheets.

    In January, Malaysia revised duties on cold-rolled coils of alloy and non-alloy steel from Vietnam to 7.42-33.7 percent for the period between January 24 and May 23.

    The U.S. and Canada have also slapped anti-dumping duties on Vietnam’s steel products in recent years.

    The Trade Remedies Authorities of Vietnam has advised local steelmakers to diversify their markets to avoid being punished with such duties.

    Nguyen Thi Thu Trang, director of the Vietnam Chamber of Commerce and Industry’s (VCCI) WTO Center, said that steel producers need to prepare themselves with knowledge of regulations on international safeguard measures and cooperate with other countries’ trade authorities to resolve issues.

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  • Steel giant to manufacture containers for first time in Vietnam

    Steel giant to manufacture containers for first time in Vietnam

    Steelmaker Hoa Phat plans to manufacture 500,000 twenty-foot equivalent unit containers a year to mitigate a shortage since containers are stuck at ports after Covid-19 hit trade.

    It plans to build its first container manufacturing factory in Binh Duong or Dong Nai province and near Cat Lai Port in HCMC and Cai Mep – Thi Vai International Port in Ba Ria – Vung Tau Province.

    The southern region has an especially high demand for containers. Market research by Hoa Phat in fact found that three out of every four containers are used there.

    Nguyen Manh Tuan, vice chairman of the Hoa Phat Group, said the containers would be made of weather-resistant hot-rolled coil steel with enhanced corrosion resistance produced at its Hoa Phat Dung Quat 2 steel plant to be launched in early 2022.

    The logistics sector is suffering from a severe container shortage since many remain in various ports around the world, unable to offload their goods, while demand for containers to export to Europe and the U.S. is high.

    At the end of 2020, the Vietnam Maritime Administration had to order container shipping lines to publicly declare their freight rates and surcharges, saying it had received numerous complaints about inflated prices due to a shortage of containers and warning it would not tolerate gouging.

    Most shipping lines have hiked freight by 2-10 times in the last three months.

    In Vietnam, there is no container production.

    Tuan explained that the price of weather-resistant hot-rolled coil steel used for making containers is high, and would cause losses for companies if they have to import it.

    “Hoa Phat can produce this type of steel,” he said.

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