Steel prices in Vietnam are expected to reach a four-year peak this year as global steel demand is forecast to recover and as producers face supply disruptions against the backdrop of the coronavirus, according to media reports.
Vietnam’s domestic steel demand is expected to increase by eight percent this year, driven by infrastructure investments, Vietnam-based SSI Securities Corporation said in its report. Increased domestic demand will take steelmakers’ profit margins back to normal levels.
According to the Vietnam Steel Association, in 2020 domestic construction steel prices in Vietnam rose by 25 percent, while hot rolled coil prices were up 43 percent, both compared to 2019.
In the second half of last year, steel prices in Vietnam started to increase amid strong domestic demand resulting from increased government spending on public construction projects and restocking by domestic traders as prices began to increase.
According to the World Steel Association (worldsteel), Vietnam’s steel output in the first 11 months of last year increased by 28.8 percent year on year. In 2020, Vietnam’s steel exports increased due to production disruptions among major global steel producers such as the EU, the US, India, Japan and South Korea. Vietnam’s steel demand is forecast to increase by 4.1 percent in 2021, following the decrease of 2.4 percent last year. Steel demand in emerging markets, excluding China, is expected to increase by 9.4 percent in 2021.