Tất cả bài viết

With positive developments in consumption output in the final months of 2023, the Vietnam Steel Association (VSA) recently forecasted that the steel industry this year may increase by 10%, driven by expectations of global steel demand recovery.The steel industry and the positive signalsThe strong recovery of the steel industry this year is established against the backdrop of negative impacts from macroeconomic conditions and the 'freeze' of the real estate market in 2023. In the upcoming year, the steel industry is forecasted to experience significant growth, leading to the recovery of profits for businesses within the sector.As we step into 2024, the internal economy displays indications of recovery, bolstered by governmental and sector-specific policies that encourage public investment. It is anticipated that the steel industry in 2024 will witness a growth of 6.4%, reaching nearly 21.6 million tons. Not only in the domestic market, but the volume of Vietnam's steel exports is expected to sustain growth due to the increasing global demand for steel. Accordingly, the export of finished steel and semi-finished products is projected to rise by 12%, reaching nearly 13 million tons. This target is set based on the expectation that Vietnam's GDP will grow by 6–6.5% this year. The increased consumption of the steel industry is largely attributed to the signs of recovery in the real estate market in the fourth quarter of 2023 and real estate projects are expected to boost sales in 2024.The steel industry relies on the market's recoveryAt present, the economy has recorded some bright spots regarding policies to remove difficulties, promote public investment and stimulate economic growth issued by the government and various ministries. Accordingly, the Vietnam Steel Association (VSA) also forecasts that the prospects for Vietnam's steel production may increase by about 10% in 2024 and 8% in 2025 as the demand for steel from domestic economic sectors recovers.The forecast for the production of finished steel in the period 2024–2025 is expected to reach approximately 28–30 million tons, with domestic steel consumption ranging from 21-22.5 million tons. The primary drivers for steel consumption stem from the gradual recovery of the real estate market. The government and various ministries are actively investing in and developing infrastructure and implementing public projects. This concerted effort is poised to revitalize the domestic steel industry, leading to a surge in profits for steel manufacturers after a prolonged period of losses and inventory challenges. Although actual steel consumption by end consumers has not fully recovered as anticipated, the price surge at the beginning of 2024 was predicted by steel industry experts since the end of 2023, when production material costs continuously increased for several weeks. With the momentum of the recovery, steel prices are forecast to continue rising before the Lunar New Year, possibly surpassing the 15 million VND per ton mark.Therefore, all enterprises in the steel industry expect the government, as well as relevant ministries and departments, to implement stronger policies to support the real estate market and promote the development of the steel market in 2024.

The steel industry has gradually regained growth in recent times. Predictions suggest that the demand for steel exports is expected to recover in the coming quarters, given the high domestic selling prices in the EU, the US, and Asian countries.According to a recent steel industry outlook report, VCBS Securities Company stated that steel production activities have shown signs of recovery in the mid-2023 period, contributing to an increase in the overall supply. This comes as manufacturers return to profitability after adjustments in input costs such as ore and coal, supporting profit margins. Additionally, a more positive hydroelectric output is further bolstering the energy supply for steel production mills.The export volume of construction steel also demonstrates a strong recovery for the steel industry since August 2023, as China gradually reduces competition in the export of construction steel towards the end of the year. Specifically, in November, Vietnamese enterprises exported over 7.4 million tons of steel, a 29% increase compared to the same period last year. The main export markets include ASEAN, the EU, the US, India, and Taiwan, among others. As for galvanized products, although the export volume has not reached the levels of 2021, it has shown a significant recovery compared to the low point in August 2022. A substantial contribution to this recovery comes from the export of steel to the EU market, where the supply has been heavily affected by the earthquake in Turkey and ongoing energy shortages.Regarding the export market outlook, demand for the export market will remain positive in 2024. Specifically, according to the forecast by the World Steel Association (WSA), global steel consumption is expected to grow by 1.9% in 2024. The substantial recovery in many countries, such as Europe and the United States, is expected to have a positive impact on the production and prices of exported galvanized steel, with export steel prices expected to increase by 9% in 2024, improving the gross profit margins of steel exporting companies. Additionally, China, as the largest and least dynamically growing country in 2024, is projected to have steel consumption growth of only 0%. This presents an opportunity for the Vietnamese steel industry to boost exports to other potential countries.If the export market expands, the steel industry can benefit from increased exports of its products. However, alongside this, fluctuations in international trade policies can impact the steel industry. Trade protection measures or changes in tariffs may present new challenges or opportunities for steel businesses. Therefore, steel enterprises are compelled to seek and maintain new export markets to ensure diversity and stability in income sources. Generally, in 2024, the steel industry is expected to see signs of recovery from the export market. Particularly in major markets such as the EU, Mexico,.. This will be an opportunity for Vietnamese steel businesses to establish and develop the Vietnamese steel brand on the global steel map. 

A new crisis is brewing in the Red Sea, one of the world's vital trade routes, with the potential to disrupt supply chains and drive up oil prices and inflation. This comes at a time when economic growth is slowing down.Red Sea - Important Maritime TransportationAs one of the crucial maritime routes, it accounts for approximately 15% of global maritime transportation volume. The Red Sea shows no signs of easing tensions, especially as recent Houthi warnings indicate a potential expansion of their targets in the region if the United States launches a campaign against their forces.The mentioned developments come shortly after Washington announced the formation of a coalition comprising various countries, including the United Kingdom, France, Italy, Spain,... to address Houthi attacks on shipping in the Red Sea. Simultaneously, this coalition has deployed military assets to counter missile and drone attacks.Conflict in the Red Sea and the Risk of an International Transportation CrisisThe Suez Canal is currently the shortest maritime route connecting Asia and Europe, accounting for approximately 15% of global maritime traffic. The conflict in the Red Sea has a significant impact on the global transportation and trade situation. This route is closely linked to the Suez Canal, meaning that ships avoiding the Red Sea also have to steer clear of the crucial route through the Suez Canal. This canal is one of the seven critical chokepoints for global transportation.The drone and missile attacks by Houthi forces in Yemen on vessels navigating the Red Sea are forcing global shippers to reroute their journeys around the Cape of Good Hope in Southern Africa. This redirection extends the sea travel time by an additional 10–14 days. The harsh weather and frequent rough seas at the Cape of Good Hope and the Mozambique Channel result in faster fuel consumption, leading to increased fuel costs. Additionally, vessels face numerous challenges, including fuel replenishment, cargo restocking, customs issues, overloading and inadequate infrastructure at African ports.These wars are creating a significant risk of disruption to transportation activities through the Suez Canal and the Red Sea, leading to increased shipping costs for various types of vessels, including tankers, container ships, and bulk carriers, thereby indirectly supporting the recovery of oil prices. Additionally, ships passing through the Red Sea are facing significantly higher conflict-risk insurance premiums, with current fees having surged by fivefold. Meanwhile, many transportation experts believe that disruptions in routes may lead to a situation where ships are in the wrong position and containers are misplaced, resulting in port congestion.In the face of the complex developments in the Red Sea and economic risks, the United States, the European Union (EU), the North Atlantic Treaty Organization (NATO) and several countries, including Yemen, have issued a joint statement condemning Houthi interference in maritime rights and freedoms.If the “Red Sea crisis” persists for only a short period, consumers may not notice much, except for possibly higher energy prices. However, if the situation prolongs, it not only affects maritime transportation but also poses a risk of uncontrollable inflation impacting the world.

The global steel demand for wind turbines industry is expected to experience a significant surge of 45% over the next decade, driven by the escalating capacity and size of turbines. Specifically, the projected consumption output within the industry is anticipated to rise from 10.5 million tons in 2023 to 15.1 million tons by the year 2032.The trend in the steel demand for wind turbines sector in next decadeSteel has long been the primary material for constructing wind turbines due to its strong structural properties and corrosion resistance. Consequently, with the increasing shift towards renewable energy, the rising global steel consumption in the wind energy industry indicates a clear signal. As of 2023, the steel demand for wind turbines stands at 10.5 million tons and this figure is projected to surge by 45% in 2032 due to the growing capacity and size of turbines.Data on the development of wind turbine sizes is annually documented. According to this information, the average size of onshore and offshore wind turbines in projects recorded from 2019 to 2022 was 2.9MW and 6.2MW, respectively. In 2023, these figures experienced a significant increase, reaching 4.3MW for onshore and 9.2MW for offshore turbines. Notably, in offshore wind turbine projects, industry manufacturers are currently aiming to introduce the next generation of turbines with an average capacity ranging from 15 MW to 20MW, which is double the current average capacity.The steel demand for the offshore segment is believed to be significantly higher than that for onshore, with the steel consumption growth rate for onshore reaching only 32%, whereas for offshore, this figure rises to 101%. Typically, steel constitutes 80% of the composition of a wind turbine. However, offshore turbines require more steel. The reason is that the foundations of offshore wind turbines must be made of steel instead of concrete and cement used onshore because steel provides better corrosion resistance in a marine environment.Predictions for steel consumption scenarios in wind turbine projectsThe production of larger turbines will entail a higher demand for steel. Therefore, the steel consumption in the wind energy industry is anticipated to grow significantly with the following predicted scenarios over the next decade:Small Capacity Turbine ProjectsTurbines classified under the small capacity category typically have a capacity of 2MW for onshore types and 6.2MW for those installed offshore. Among the installed projects, these turbines constitute the largest market share, yet they have the lowest steel consumption. Specifically, the total steel demand for wind turbines over the next 10 years, starting from 2023, is estimated to reach 124.8 million tons. This is equivalent to consuming 107 tons of steel per 1 MW for onshore turbines and 119.5 tons of steel per 1 MW for offshore turbines.Medium Capacity Turbine ProjectsThe assumed scenario for the trend in steel consumption for medium-capacity turbines (3.45-5MW for onshore and 9MW for offshore) over the next decade is expected to reach 128.7 million tons. The projected steel consumption rate per MW is estimated to be 110 tons/MW for onshore and 125.8 tons/MW for offshore.Large Capacity Turbine ProjectsOver the ten-year period from 2023 to 2032, projects involving large-capacity turbines (6 MW-7.2 MW for onshore and 15 MW and above for offshore) are predicted to see rapid development, capturing a significant market share within five years, by the mid-decade. The total steel consumption for these projects is forecasted to reach 130 million tons, with a predicted steel consumption rate of 113 tons/MW for onshore and 132 tons/MW for offshore. With the future deployment strategies of large-capacity wind turbines in the energy sector, the anticipated surge in steel demand is expected to create expanded opportunities for global steel manufacturers. This trend signifies a broader scope of consumption beyond traditional sectors such as construction and automotive. The renewable energy sector, particularly the wind energy industry, continues to be one of the top potential markets for steel consumption, with clear indicators of continuous growth. To gain further insights into the steel applications in wind turbines, please refer to additional articles in our Steel Blog!