Enterprises raise construction steel prices to compensate for costs and reduce losses

The price of raw materials increased so much that domestic factories had to increase their selling prices many times to compensate for production costs and reduce losses.

According to the Vietnam Steel Association (VSA) in January 2023, construction steel production decreased due to coincident with the Lunar New Year holiday. Specifically, construction steel production this month reached 875,830 tons, flat compared to the previous month and down 22% compared to January 2022.

Sales of construction steel reached 844,110 tons, down 18% from the previous month and down 20% compared to the same period in 2022. In which, export of construction steel reached 147,563 tons, down 36% compared to January 2022.

Regarding prices, on 6/2, the domestic construction steel price increased by 300,000 - 400,000 VND/ton compared to the previous adjacent price. This is the 4th price increase of rebar and coil since the beginning of 2023 with an increase of 850,000 - 1,100,000 VND/ton, depending on the brand and product type.

The average price of domestic construction steel is now about 5% higher than the end of 2022 but still 8% lower than the same period last year. Because the selling price of finished steel increased more slowly than the growth rate of input materials, the business performance of construction steel companies was still low, and it was difficult from purchasing input materials to consuming output finished products.

VSA said that the price of raw materials increased significantly, causing domestic factories to increase selling prices many times to compensate for production costs and reduce losses. The mills have moves to adjust the price of coil/rebar or CB4, CB5/CB3 of the mills, showing that the price increase and price structure by category is being carried out step by step.

In terms of market share, Hoa Phat Group leads with nearly 36% of national construction steel consumption, equivalent to more than 300,000 tons, down 20% compared to January 2022.

Hoa Phat Group said that both New Year holidays and Lunar New Year holidays are in January, making the market demand for construction materials in general and iron and steel in particular low. Therefore, production and sales volume both decreased significantly compared to the same period in 2022.

Vietnambiz