Vietnam’s major manufacturers have raised steel prices to a 7-month high despite plunging demand.
On Tuesday, Hoa Phat Group hiked its prices for rebar steel by 0.95% to VND15.99 million ($678.55) per ton.
Local steelmakers Viet Y, Viet Duc, Kyoei and Viet My all made similar adjustments, while Pomina’s price tag towered above at VND17.6 million, 10% higher than market average.
Manufacturers said that steel prices, which are now at their highest point since August, have been rising since October last year due to an input materials shortage prompted by declining billet production.
Steel billets are raw steel bars not yet processed for the market, and billet makers reduced production due to low prices in earlier months.
Steel demand will likely remain meager in upcoming months.
Steel products sales in the first two months of 2023 plunged 23% year-on-year to 3.8 million tons, while exports dropped 10% to 1 million tons.
Analysts at brokerage Mirae Asset Vietnam said that the steel market is largely dependent on the property sector, and the real estate market cool down this year has thus adversely affected the steel industry.
Steel production is therefore expected to drop 10.5% from last year to under $17.9 million tons this year.
However, manufacturers hope that public spending, which is set to hit an historic high of VND704 trillion this year, will help boost demand as the government aims to disburse at least 95% of that figure.