The local steel market continued to be gloomy, with reductions in production and consumption in the past 11 months, a report published by the Vietnam Steel Association (VSA) this week revealed.
Finished steel production saw a yearly decline of 11.3% to 27.12 million tonnes between January and November. According to the report, sales of finished steel also plunged 7% year-on-year to 25.1 million tonnes.
In November alone, finished steel production reached over 1.82 million tonnes, down 11% month-on-month and 37% year-on-year while consumption of all kinds of steel hit above 1.94 million tonnes, up 3% month-on-month but down 16.2% year-on-year.
In terms of exports, 7.54 million tonnes of steel were shipped abroad in the past 11 months, earning a turnover of $7.4 billion, year-on-year decreases of 38.1% in volume and 32% in value, according to the General Statistics Office. Sluggish consumption and high inventories caused factories to reduce their production capacities or halt production.
According to the company, the prospect of recovering global steel demand continued to face difficulties when inflation was high. Moreover, the implementation of tight monetary policy in many countries would affect the prospect of world economic recovery in December.
Meanwhile, the domestic market had not shown any clear signs of recovery and the real estate market faced many challenges. That would have a great influence on the steel consumption.
All businesses were looking for ways to restore output and improve profit results in the last month of 2022, resulting in fiercer competition among factories and pushing up the selling prices of steel.
In the recent report on the prospects of the steel industry, RongViet Securities Corp also said that the sector had little chance to recover in 2023 due to weak consumption, the pressure of the exchange rate and interest rate on financial costs.
In 2023, the Government would foster investment in infrastructure projects with the goal of ensuring economic growth that could support domestic steel demand, especially for construction steel.
However, the real estate industry which might not recover after a gloomy year could not help domestic steel demand rebound next year, experts have said.