Overview of the global steel market in the first quarter of 2022

World steel market
The first quarter of 2022 was a difficult time for global crude steel production. Accordingly, the total global crude steel production reached 456.6 million tons, down 6.8% over the same period in 2021, according to the latest data from the World Steel Association (World Steel).

It is known that the leading cause of this decline is the "zero Covid-19" policy in China - the world's largest steel producer by volume and the conflict between Russia and Ukraine, the two largest steel exporters in the world. large steel exports to the EU market.

Specifically, since the beginning of March, China has faced a new wave of Covid epidemics. Accordingly, Tangshan - China's largest steel-producing city had to close strictly in the second half of the month, hindering both supply and demand for steel products. Control measures have since spread to many other cities.

In the first quarter of 2022, China's steel output fell by more than 10%, to 243.4 million tons year-on-year. Recently, the Chinese government continues to announce a policy of cutting domestic production and restricting exports. Therefore, this trend will continue in the short term.

On the other hand, Ukraine's steel production has been declining since the conflict between Russia and Ukraine began. Specifically, Russia's steel production has decreased by nearly 20% compared to the same period last year. In contrast, Russian steel production was not affected, estimated at 6.6 million tons.

Following world fluctuations, EU steel production was also affected during this period. Total crude steel production reached 12.8 million tons in March, down 8.5% year-on-year. It is known that the shortage of input materials and the increase in energy costs are the reasons for the decline in crude steel output in this market.

Supply chain problems in downstream industries continue to plague Japanese steelmakers. Falling auto production, amid shortages of semiconductors and other components, has dampened demand. The industry responded by reducing production to 23 million tonnes, in the first quarter of 2022.

In the opposite direction, India's steel production saw a significant growth with 10.9 million tons of crude steel in March - the highest monthly total production ever.

U.S. steel production in Q1 was virtually unchanged, compared with the 2021 equivalent, of 20.3 million tons. Also during this period, 8.5 million tons of steel were imported into the country from three main countries: Canada, Mexico and Brazil.

According to a recent report of the World Steel Association (Worldsteel), 2022 will be a promising year when the epidemic is under control, construction demand recovers strongly, and steel demand will have a growth step in the future. this year.

Domestic steel market
In Vietnam, in the first quarter of 2022, the country's finished steel production reached 8.45 million tons; consumption reached 3.12 million tons, of which exports reached 1.82 million tons, up 7.7% over the same period in 2021.

During the period, Vietnam exported about 2.28 million tons of steel, down 22.15% over the same period last year. Export value reached 2.3 billion USD, up 12.53% over the same period in 2021. It is known that the main export market for steel of all kinds of Vietnam in the first quarter of 2022 is the ASEAN region, accounting for 40, 57%; EU region with 19.32%; United States is 8.34%; Korea is 6.97% and Hong Kong is 3.91%.

According to the Vietnam Steel Association (VSA), many factors along with the conflict between Russia and Ukraine since the end of February have affected the selling price of construction steel in the domestic market. Factories increase the selling price of finished steel to partially offset the production cost, which leads to an increase in sales volume due to speculation by distributors.

Accordingly, the domestic price of construction steel was adjusted to increase in March by about 800 - 1,000 VND/kg since the end of February, currently at an average of 18,550-18,750 VND/kg depending on the type of product and each individual product. specific businesses and regions. Domestic billet price increased by about 1,000 VND/kg to 1,300 VND/kg keeping the price at 17,100 VND/kg to 17,300 VND/kg at the end of March 2022.

On the other hand, with China still restricting steel production due to the continuing policy of restricting emissions and the high steel price level, it creates favorable conditions for Vietnamese steel enterprises to continue to develop and promote. in the export sector.

In the newly released steel stock outlook report, BSC Securities believes that in 2022, domestic steel consumption will grow well based on increasing disbursement of public investment, focusing on infrastructure, and civil construction activities recover when the epidemic is under control.

The Vietnam Steel Association also forecast that the steel market in the first quarter of 2022 may start with a new price level when the price of steel materials continuously increases and domestic demand has good signals.

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