A strange phenomenon happened to Vietnam's steel industry in April

A recent analysis report from BSC Securities commented that the steel market showed signs of recovery in April.

First, domestic steel output in April is positive, and dealers are accumulating off-season in the context that the second quarter is usually a discharge season. Specifically, BSC estimates that Northern domestic steel output in April increased by 30%-35% over the previous month, and  increased by more than 40% over the same period, equivalent to the same period in 2021 - the period before the industry Real estate is tightened.

Second, because Vietnam's steel industry imports raw materials for production, domestic steel prices often fluctuate equivalently or more strongly than world steel prices, especially China.

However, in the period from February to April, BSC found that domestic steel prices decreased by only 2% and remained higher than the equilibrium price zone – October 2023, October 2022. Besides, the price reductions are relatively small (from 100 - 200 VND/kg/reduction). BSC believes that the narrow price reduction margin, accompanied by a sharp increase in output, partly shows that purchasing power is returning.

BSC believes that steel price developments will be positive and on an upward trend in the second half of 2024 and 2025.

As of early April, steel prices touched the bottom price range of October 2023 and November 2022. BSC believes that it is unlikely that steel prices will continue to decrease further and expects steel prices to trend up in the second half of 2024 thanks to the recovery of the domestic and Chinese steel markets.

CafeF