[STEEL SECTOR] - Overcome challenges
- The accumulated production of steel in Vietnam reached 13.1 million tons for 6M2023, which decreased by -20.9% YoY, while the steel consumption for the accumulated 6M2023 was 12.4 million tons, which declined by -17.5% YoY. This was due to low demand in the real estate market. High-interest rates and problems with real estate bonds in 2022 had pressured the demand in the first half year of 2023. Although the accumulated consumption and demand were still low compared with the previous year, the demand and consumption of the steel industry started to bounce back again in February.
- Steel consumption hit the bottom of 1.7 million tons in January. Since then, the monthly consumption of steel grew. When compared to the beginning of the year, the consumption of steel in June climbed by 26% to 2.1 million tons, a slight drop compared to June/2022. Government support for the housing market and infrastructure spending led to the steel industry’s recovery.
- The steel export situation has significantly improved since the beginning of the year, with consecutive monthly increases in output and export value. In May 2023, Vietnam exported approximately 1.3 million tons of steel, representing an increase of 52% YoY. The export value also experienced growth, reaching over USD 931 million, a 15% YoY increase. During the first five months of 2023, Vietnam exported around 4.8 million tons of steel, marking an increase of 10.2% YoY in volume, but a value decrease of 16.1% YoY.
- The majority of companies in the industry have exceeded their profit bottom in Q4/2022. However, the recovery status of companies varied significantly. For companies that effectively control costs and possess a comprehensive value chain, such as HPG, tend to experience better improvements when the prices of industry input materials decrease significantly. Additionally, enterprises with a significant portion of their revenue derived from exports, like NKG, will benefit from the rebound of the export market, leading to enhanced business outcomes.
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