Steel Market Reaches Out Against Difficulties
Steel NewsDate: 12-07-2023 by: Nhu Quynh
According to the latest iron and steel market report, steel sales volume in May reached more than 2.3 million tons, up about 13.6% month over month and on par with the same period in 2022. This is the best result from the beginning of the year so far, and the steel industry is expected to recover in the fourth quarter of 2023.
Demand for steel market is still weak
After a period of consecutive price increases, the world steel market tends to slow down and pause at 113.37 USD/ton, a slight increase of about 0.71%. Global steel demand has the potential to start recovering in 2023 after falling 3.2% in 2022. Accordingly, two regions, including East Asia and Southeast Asia, will contribute most of the growth in demand in 2023.
In the first half of 2023, the iron ore market recorded many fluctuations when it sometimes reached 130 USD/ton, thanks to the recovery of China - the world's No. 1 steel market. However, iron ore prices then fell again due to slower global economic growth.
The iron and steel market slowed down because the Chinese government's economic recovery stimulus policies were not strong enough. Especially in the real estate sector, which consumes a lot of iron and steel and is the driving force for the economic development of this country.
Similarly, the North American market, the region that consumes about 7.5% of global steel production, is also facing high-interest rate pressure, bringing the risk of recession. In the European market, which currently accounts for more than 8% of steel consumption, after raising interest rates in June 2023, steel demand in this region is expected to decrease by about 1% in 2023 before recovering by about 5.4% by 2024.
The steel market rises up against difficulties and challenges
In 2022, Vietnam will be the 13th largest steel exporter in the world, accounting for 3.4% of the global market share, and it will also be the 12th largest steel importer in the world, accounting for 5.5% of the world's total. This contributes to affirming the position of Vietnam's steel industry in the world steel market. The low iron and steel prices will benefit the imports of Vietnamese enterprises. In the first 5 months of the year, the whole country imported about 4.6 million tons of iron and steel, down about 12.4% in volume and nearly 30% in turnover due to the much lower iron and steel prices. In contrast, Vietnam exported nearly 4.3 million tons of iron and steel, up 10% over the same period last year.
The domestic steel market weakened, forcing factories to reduce prices to increase competitiveness and boost consumption. In the first 5 months of the year, nationwide steel production reached more than 11 million tons, down 22% compared to last year. Steel products sold reached 10.4 million tons, down 19.3%; exports reached more than 3.1 million tons, up 2.6%.
With the above signs, it can be seen that the steel market is moving in a positive direction. Difficulties will ease at the end of the year, especially in the fourth quarter of 2023, because this is the period of high demand when the works are accelerated. Besides, public investment will continue to support domestic steel demand.