Steel sector grows 24 percent in nine months

14:20 | 22/10/2017 Industry

The local steel sector saw a high growth rate in the first nine months of the year, despite difficulties, said the Vietnam Steel Association (VSA).

Vietnam's steel sector saw a high growth rate in the first nine months of the year - Photo: moit.gov.vn

The VSA’s data showed that from January to September, the country’s steel output was 15.4 million tonnes, posting a 24.2 percent year-on-year increase. Steel consumption also rose by 20.5 percent from the same period last year.

The steel output in September alone reached 836,624 tonnes, increasing 19 percent from the corresponding period last year and 18 percent from the previous month.

The steel consumption last month dropped 6.5 percent from the previous month to 740,565 tonnes, but represented a 16.5 percent year-on-year rise. Therefore, steel inventories in September rose 28 percent from the previous month to 579,342 tonnes.

Prices of steel billet for production fluctuated at 525-530 USD per tonne, reducing 15 percent from the beginning of last month. In the third quarter of the year, the steel billet price rose 90 USD per tonne in comparison with the second quarter.

However, the construction steel price did not increase, remaining stable at 12.5 million VND (550USD) per tonne in the north and 13.5 million VND (594 USD) per tonne in the south.

The average capacity of the domestic steel sector has been at 70 percent to avoid high inventory.

Vietnamese steel producers are still facing pressure from imported steel. In the first eight months of the year, imported steel reached 13.5 million tonnes worth some 7 billion USD, reducing 22 percent in terms of quantity but reporting a 3.8 percent increase in terms of value, in comparison with the same period last year.

The decreasing import amount was mostly seen at cold rolled steel coil, as Formosa Ha Tinh Steel Plant has been able to produce the steel.

In addition, the trade defence measures on some steel products of coated steel, alloyed steel and steel bar have helped reduce imports.

Producers of construction steel and others are still facing fierce competition from imported products to maintain their market shares.

Local steel producers, therefore, need to keep a close control on the quality of imported steel to make the market healthy.

Many domestic steel producers have been actively investing in modern technologies and expanding markets to improve their products’ quality to attract foreign customers.

Theo VNA