Steel Industry 2024 Prospects for Recovery from the Export Market

Steel Industry 2024 Prospects for Recovery from the Export Market

Steel NewsDate: 09-01-2024 by: Nhu Quynh

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.