Steel prices have risen by as much as VND1 million per ton since the beginning of the year, but steel manufacturers have incurred losses.
The Vietnam Steel Association has attributed the steel price hike to rising import prices of input materials such as coal, iron ore, steel scrap and rolled coils, the Vietnam News Agency reported.
Securities firm Vndirect projected that the net income of local steel manufacturer Hoa Phat Group might turn negative due to weak demand and lower-than-expected production.
In the first two months of 2023, the raw steel output of the steelmaker plunged 42% year-on-year, while its production of construction steel, hot rolled coils and steel billets plummeted 34% over the same period of 2022.
Business conditions of the steel industry would remain bleak this year due to fierce competition in the domestic market, high interest rates, exchange rate volatility and tight monetary policy, Vndirect said in its market report.
However, steel demand may soar thanks to China’s easing of Covid-19 restrictions and if public investment projects make good progress.