Steel Market In 2022: A Difficult Year

Steel Market In 2022: A Difficult Year

Steel NewsDate: 06-02-2023 by: Hira Hoang

In 2022, the global economy will face difficulties when inflation is high, and steel-using industries will slow down. Meanwhile, the price of raw materials for steel production increased, leading to an increase in production costs and a decrease in steel demand, which led to a reduction in crude steel production and finished steel products of all kinds—the period in 2021 from the beginning of the second quarter of 2022 until now. 

In Vietnam, in 2022, in the context that the domestic economy recorded a bright spot with a growth rate of more than 8%, it was a challenging year for the steel industry. Generally, in the fourth quarter of 2022, the production and sales of steel products had negative growth compared to the previous quarter. However, the export volume of the fourth quarter increased better. In 2022, the production of finished steel products of all kinds reached 29.3 million tons, down 12%. Sales of all types of steel reached 27.3 million tons, down 7.2% compared to 2021, of which finished steel exports Products of the Association's member enterprises decreased by more than 20% compared to 2021.

According to experts, domestic steel consumption in 2023 can be supported by public investment and transportation projects. However, rapid inflation and tightening global monetary policy reduced investment and consumption demand, weakening steel consumption from the third quarter of 2022. Steel exports will remain quiet in the first and second quarters and will not recover until mid-2023 when the pressure to raise interest rates eases globally.

Securities companies also said domestic steel producers will still face difficulties when construction demand decreases and input material prices increase. However, the expectation that the Chinese market will recover and the domestic public investment disbursement target is expected to increase by 20-25% will be the driving force for the recovery of the steel industry in the second half of this year.

Source: Vietnambiz