Steel News

As a country with a developed steel industry providing more than 50% of global steel output, however, China is now massively exporting steel, causing concerns about global oversupply. The main reason comes from the weakening of the real estate market, which causes the country's domestic consumption to decline. Join MRS Steel to learn more through the article below!China's steel industry boosts exportsAccording to a report by the National Bureau of Statistics, in the first 2 months of 2024, China exported nearly 16 million tons of steel, an increase of 32.6% over the same period last year. This is also considered the highest steel export level of the Chinese steel industry from 2016 until now.According to Nikkei Asia, China's steel exports this year will equal or exceed last year's level, as China is on track to export about 90 million tons of steel and closer to 110 million tons in 2015, when it will witness an increase in anti-dumping measures around the world. This shows that the Chinese government is gradually stimulating the country's economic recovery.China just reported its highest steel export figures in eight yearsCurrently, China provides about 55% of the world's steel output. Therefore, even a small increase in exports can lead to downward pressure on prices in world markets. Therefore, the Chinese steel industry's promotion of exports has affected the steel industries of other countries, especially Southeast Asian countries, which are China's main export markets. In September 2023, the country's steel exports to Thailand increased by about 60% year-on-year, with exports to Malaysia increasing by about 80%. The amount of steel exported to Indonesia doubled and to Vietnam more than quadrupled.Pressure for Vietnam's steel industryA large amount of imported steel from China continuously floods the Vietnamese market, causing great pressure on the domestic steel industry. In just the first 2 months of 2024, the amount of steel imported from China reached 1.8 million tons, of which Vietnam's HRC alone imported from China reached 1.4 million tons, accounting for 74.2% of the total amount of HRC imported in the first 2 months of 2024.The reality of China's steel imports increasing sharply in the context of Vietnam enjoying an import and export tax of 0%. Trade defense measures have been lifted; other steel products, such as galvanized steel sheets, color steel sheets, steel pipes, prestressed steel,... are not subject to any trade defense measures. Facing pressure from imported steel, since 2023, the Vietnam Steel Association has made recommendations to the government to strictly control the import of steel products into the Vietnamese market.Chinese steel exports a lot, causing pressure on Vietnamese steelAs China increases steel exports, the country is turning to high-value-added products, putting pressure on domestic steel producers such as Hoa Phat, Hoa Sen, Ton Dong A,... Once again, Vietnam's steel industry faces a big challenge when it has to compete with cheap steel sources from China. This raises a warning bell for Vietnam's steel industry to have appropriate policies to ensure its development. development of domestic steel enterprises.Above is the information that MRS Steel sends to you about the problem of the world steel industry having excess supply because the leading country in steel production, China, is promoting exports. With China promoting exports, it not only affects Vietnam's steel industry but also the steel industry of other countries.

In the context of inflation and global economic recession, the world's largest mining company BHP (Australia) still has uncertainty about the prospects of the steel industry due to the factor of China - the world’s largest steel producer. Below are the top 7 main reasons that make it difficult for BHP to predict the global steel market in 2024.1. High steel production and exports from China and India in 20232023 was the fifth consecutive year that China recorded crude steel output above 1 billion tons thanks to sustainable demand from non-residential. Chinese steel industry has seen strong growth in net exports with total turnover reaching its highest level in the past 7 years. Exports rose to 98 million tons in 2023, the highest since 2016.The Indian steel industry in 2023 also marked significant growth with crude steel output reaching 140 million tons, an increase of 12% compared to 2022. The Indian steel market was considered the only bright spot on the Asian steel map in 2023 amid weak demand and persistent oversupply in the region.2. Strong blast furnace usage rate in ChinaChina's blast furnace (BF) utilization rate averaged 88% in the first half of 2023 and 90% in the second 6 months, reaching 89.1% for the whole year. BHP explained the reason for the high BF rate is because:Production at electric arc furnaces (EAF) is limited due to lack of competitiveness, weak demand for construction steel, reduced scrap availability and loss of profits.Abundant steel supply in the global export marketActivity of the flat steel industry in 2023 was relatively stable with demand increasing by 2% compared to 2022, of which the second half of 2023 increased by 3.2% y/y.3. Low real profits of Chinese steel manufacturers The profit margin of steel mills in 2023 was still very low. BPH estimated margins for BF-BFO furnaces to average around $7/ton in 2022 but fell to -$6/ton in 2023.4. Stable China's steel output forecast in 2024 BHP's preliminary estimate of China's crude steel production in 2024 is in the range of 1-1.1 billion tons. However, output could still be affected by possible mandatory production cuts in China. Overall, up to now, BHP still does not have solid data on the outlook for Chinese crude steel output in 2024.5. Decline China's steel exports in 2024 BHP predicts China's net steel exports in 2024 will decrease compared to 2023 at more than 87 million tons. The reason is that Beijing aims to limit steel production, but it is unlikely to fall below 54 million tons due to China's price advantage in the global steel market.6. Uneven demand of the end-user sector in China BHP weighs in on the outlook for end-user demand for steel in China in 2024, including the pace of development, scale and structure of the housing construction recovery as well as the ratio of steel usage per unit of GDP. Currently, BHP predicts real GDP will increase from 4.5 - 5%, after growth of 5.2% in 2023. The fields of housing, infrastructure, machinery and equipment manufacturing, automobiles and construction ships, consumer goods,... continue to decline.7. China to enhance steel reservesIn the long term, BHP believes that China will increase its accumulated steel inventory by 1.5 - 1.75 times when the urbanization rate reaches about 80%. The Australian mining firm also expects China to improve living standards similar to those of countries currently on the edge of the high-income bracket by mid-century.Above is the latest news about predicting the world steel situation in 2024. Don't forget to follow and read more useful articles on the topic of Vietnamese and global steel at MRS Steel!

According to the World Steel Association (WorldSteel), in 2023, global crude steel production reached 1,888 million tons, with Vietnam contributing 19 million tons to this figure. Despite a 5% decrease in crude steel production compared to 2022, Vietnam's notable achievement is an upward shift in its ranking, reaching 12th place globally among the 71 countries listed.Vietnam's crude steel production decreased by 5% but climbed one position in the rankingsIn 2023, Vietnam achieved a notable milestone as its crude steel production surpassed that of Taiwan, securing the 12th position in the global rankings. This highlights a positive outlook for steel demand in Vietnam, despite the ongoing incomplete recovery of the domestic real estate market. Additionally, leveraging political advantages, countries in the Middle East view Vietnam as a promising destination for steel imports. Experts emphasize that Vietnam's steel export volume in 2023 also benefited partly from the weakened export activities of competing nations such as China, India, and Turkey, creating opportunities to boost production capacity in the country.Vietnam ranks among the top 12 countries with the highest global crude steel production in 2023Predictions for 2024 anticipate a positive recovery in both demand and steel prices in Vietnam, with raw material prices forecasted to significantly decrease. This is expected to lead to a substantial increase in the Vietanm steel industry's profit margins. The primary driving force for domestic steel consumption comes from the expected strong recovery in the civil construction sector, while the industrial and infrastructure construction segments are projected to sustain growth throughout 2023.Regarding the export sector, the World Steel Association notes that the growth in infrastructure construction activities in the ASEAN, U.S., and EU markets, coupled with the benefits from bilateral agreements, will boost Vietnam's steel export activities this year. Therefore, it is expected that Vietnam's crude steel production in 2024 will experience a more robust increase compared to the current year, driven by both domestic and international market dynamics.China and India are the two largest steel producers globallyChina has once again maintained its position as the leading country in the global steel industry. In the past year, 2023, the country produced a staggering 1,019 million tons, sustaining its production at a stable level after two consecutive years of decline. According to analysts from S&P Global Commodity Insights, China's steel production is anticipated to decrease by 0.5% in 2024 as domestic plants seek solutions to address excess supply issues along with weak profit margins. This outcome is expected to lead to another prediction that China's iron ore imports will decline due to the slowing down of steel production.The statistical chart of raw steel-producing nations for the current year also reveals a remarkable surge in India's production, driven by robust domestic demand and infrastructure projects supported by the government's ongoing initiatives. In 2023, India recorded a noteworthy growth, with a production increase of 11.8% compared to the previous year, reaching an impressive 140.2 million tons. Notably, amidst the global decline in steel demand, India continues to maintain its position as one of the countries with the highest growth rates in crude steel production and stands out as one of the few nations showing positive growth trends.The monthly crude steel production figures for China and the world in 2023Crude steel production in Europe decline from weak demandOverall, crude steel production in Europe is reported to have decreased by 6.7% in 2023 compared to 2022. Among the 71 countries listed, the majority of nations in the European region witnessed negative growth. Specifically, Germany, recording its lowest crude steel production since 2009 with around 35.4 million tons in 2023, marked a 3.9% decrease from the previous year. Similarly, the second-largest steel producer in Europe, Italy, also exhibited a 2.5% reduction in production to 21.06 million tons.The simultaneous decline in steel production can be attributed to low consumption demand and high energy prices, presenting challenges for factories in the region. The steel industry in Europe is grappling with high production costs due to increased energy prices since the conflict between Russia and Ukraine, alongside an influx of cheaper imported products that impose limitations on local steel manufacturers.The production downturn is not limited to domestic output; steel exports to the EU also witnessed a 5.57% reduction in 2023 compared to the same period. However, the growth rate of steel exports to new markets, including Western Asia and Central Asia, experienced a substantial increase. The persistence of inflationary cycles and the strong impact of trade protectionism are considered the primary impediments to steel exports from other countries to this region. 

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.