HOPES FOR THE DEVELOPMENT OF THE STAINLESS STEEL INDUSTRY IN VIETNAM AND FOREIGN MARKET IN 2024

With prospects of demand increasing again in the last months of 2023, when production and consumption of all kinds of steel increased by more than 30% over the same period, many forecasts in 2024, the stainless steel industry can be recovered with these positive signals.

World steel market perspectives in shadow of going-on Ukraine and Russia war.

Since the halt of the Covid19 pandemic, the global stainless steel market has been experiencing substantial fluctuation caused by the world economic recession, high inflation, supply chain and political issues and the most concern is the going-on war between Russia and Ukraine.

In early 2022 when the war between Russia and Ukraine officially began to break out, it was followed by a series of negative impacts on the stainless steel industry. That led to prices of all steel products upsurge, particularly in high quality stainless steel products for household and industries, also raw materials for stainless steel production. But main cause is from Russia and Ukraine conflict, since they are both major producers and exporters as well as key coal suppliers (one of the core raw materials for the steel production) in the world. In addition, Russia is also the world’s big supplier of nickel and aluminum.

When more and more sanctions are imposed on Russia, it led to an imbalance in supply and demand of the stainless steel market, thereby pushing up steel prices. Especially in the European market, the scarcity of steel products is even more serious. Still, this can also be seen  a challenge as well as an opportunity for other steel export markets, including Vietnam.

The situation of the domestic steel market

Recently, construction steel market in Vietnam has witnessed the first rise in 2024. Domestic steel prices recorded a jump, ranging from 150,000 to 370,000 VND/ton, marking the 5th price surge in the past 2 months. The growth signals come from the fact that the property market shows signs of recovery in the fourth quarter of 2023 and real estate projects will start opening to sale in 2024, leading to an increase in demand for raw materials. In addition, key public investment projects will accelerate the construction sector in the period of 2024 – 2025.

According to the Vietnam Steel Association (VSA), construction steel consumption in November and December 2023 both increased in comparison to previous months and reached a high level in the past 20 months, growing by more than 20-40% depending on the item. For example, Hoa Phat Group, in December 2023, produced 648,000 tons of various steels, rising 4% against the previous month.

By the middle of 2023, construction steel prices had consecutively 19 times decreased in prices, dragging steel prices to the bottom in about 3 years, hovering at around 13 million VND/ton.

A representative of the Vietnam Steel Association said that the reason for the continuous decline in domestic steel prices was due to slow demand, gloomy real estate market, and public investment has not really prospered. In addition, domestic steel enterprises also had to compete with cheap steel from China when the country continuously lower its export steel prices.

“Bright window” for growth recovery of Vietnam’s steel industry in 2024?

Entering 2024, many experts predict that Vietnam’s steel market will have bright opportunities to grow stronger in comparison to 2023.

Dinh Quoc Thai, secretary general of VSA said, steel consumption would increase by 7 percents to 21.7 million tonnes. Production could reach nearly 29 million tonnes, up 7% from 2023. One of the main reasons is thanks to the projects to be implemented and accelerated such as the North-South expressway project, Long Thanh airport project…

In addition, the real estate market in Vietnam will gradually recover in 2024. The latest data of the Ministry of Construction shows that, although transactions of apartments, condominiums and land plots in the third quarter of 2023 are about 73% over the same period, they have increased by 24.7% compared to the second quarter of 2023. CBRE believes that the recovery of apartment supply will positively impact domestic construction steel demand.

Mr. Pham Quang Anh, Director of the Information Center of the Vietnam Commodity Exchange (MXV), said that the Government will continue to study and adopt appropriate remedy measures to protect the domestic steel market, along with making efforts to accelerate the distribution of public investment in 2024 to give a boost to breakthrough growth, make an important contribution to stimulating demand, encouraging domestic production and businesses and create a positive impact on production development in a number of industries such as steel, construction materials, mechanics,…

Recovery prospects for global steel market in 2024

Despite the political tensions along with tightened monetary policies, the global steel market in 2024 is still expected to recover and make desirable progress.

According to forecasts by the World Steel Association (WSA), in 2024, globally demand is expected to recover 1.9% in comparison to 2023 to 1.8 billion tons, as the EU and Indian markets recover 5.6% and 7.5% respectively over the same period.

India led the way with the oustanding growth of steel consumption despite pressure from high inflation. The government’s policies to promote investment in infrastructure construction have contributed to stimulating strong growth in the construction industry. It is expected that India’s steel consumption will grow by 7.7% in 2024.

As for the Middle East and North Africa, steel consumption is predicted to decline in 2023 with negative growth of 3.5% and will recover in 2024 due to the push to build many infrastructure and housing projects that have stalled from previous years.

Steel demand in Latin America may be up to 2.1% in 2024. This is mainly due to the fact that problems related to rising interest rates and inflation are no longer so prevalent in this region as some other countries have started to ease monetary policy.

2024 is probably the most expecting because this is the year that is predicted to be the time when the world economy will recover after a period of stagnation.

Conclusion

In summary, the prospect of stainless steel industry in Vietnam and abroad markets in 2024 is prosperously positive. However, demand for steel is still low. To achieve a sound recovery, the Government and relevant ministries need to adopt more drastic measures for the real estate market and consumer products.

Khanh Anh Company – a supplier of  high quality hygenic stainless steel products, 100% genuinely imported from leading brands in the world, such as Inoxpa, Definox, Winters, MTG, etc., we are honored to accompany and cooperate with our customers in this prosperous 2024!

KHANH ANH COMPANY LIMITED
Address: F10, street 6, Van Gia Phuc block, 295 Tan Ky Tan Quy str., Tan Son Nhi ward, Tan Phu dist., Ho Chi Minh city, Vietnam.
Email: kaco@inoxkaco.vn
Hotline: +84 28 6658 2434 – 6659 2434