A Grim Outlook for the Steel Industry: Will 30 Million Tonnes Be Enough?

According to data from the Vietnam Steel Association, in July 2024, crude steel production reached 927,180 tons, up 2.6% from the previous month and a significant 17% increase compared to July 2023.

Finished steel production of all types reached 2.527 million tons, a 2.59% rise from June 2024 (with growth recorded across all steel products except for hot-rolled coil, which decreased by 5.43%). This also marks a 5.2% increase from the same period last year, with construction steel and coated steel maintaining their growth momentum at 8.9% and 30.3%, respectively.

The remaining steel products, including hot-rolled coil (HRC), cold-rolled coil (CRC), and steel pipes, witnessed respective decreases of 5.1%, 11.7%, and 5.6%.

Finished steel sales reached 2.464 million tons, up 4.22% from June 2024 (an increase across all finished steel products) and a notable 13.1% jump from the previous year (except for HRC, which saw a 9.3% drop, and steel pipes, which decreased by 4.8%). Finished steel exports in July 2024 exceeded 681,000 tons, a 2.84% increase from the previous month but a 3.1% decline from July 2023.

Exports of construction steel, cold-rolled steel, and coated steel increased compared to June 2024, while HRC and steel pipe exports decreased by 42.1% and 5.8%, respectively.

In the first seven months of 2024, crude steel production surpassed 12.8 million tons, a 21% increase compared to the same period in 2023. Internal consumption and sales of crude steel reached 12.41 million tons, a 17% rise from 2023. Exports, meanwhile, hit 1.58 million tons, a substantial 45% increase from the previous year.

Finished steel production of all types reached 16.959 million tons, up by 9.4%. Notably, coated steel and painted metal saw the highest production increase at 29.2%, followed by construction steel at 14.6% and HRC at 2.9%. Conversely, cold-rolled coil (CRC) and steel pipe production witnessed negative growth, decreasing by 14.9% and 1.1%, respectively.

Finished steel sales reached 16.75 million tons, a 14.3% increase compared to the same period last year. Finished steel exports in the first seven months of 2024 reached 4.895 million tons, a 6.8% growth from 2023. The highest export growth was recorded for CRC at 40.6%, followed by coated steel and construction steel. However, steel pipe exports decreased by 1.2%, and HRC exports saw a slight decline of 0.8% compared to 2023.

The Ministry of Industry and Trade forecasts that finished steel production in 2024 could reach 30 million tons, a 7% increase from 2023. However, this recovery is uncertain, and steel companies continue to face challenges due to pressure from Chinese steel and an oversupply in the market.

The oversupply of various domestic steel products, coupled with increasing steel imports, will intensify price competition in the finished steel market. Additionally, global market instability and rising international freight rates pose significant risks to steel companies.

According to the Vietnam Steel Association, in June 2024, Vietnam imported approximately 1.283 million tons of steel, a 17.04% decrease from May 2024 but a substantial 34.03% increase from the same period last year in terms of import volume. The import value exceeded 934 million USD, a decrease of 17.31% from the previous month but an 11.64% increase from June 2023.

In the first six months of 2024, Vietnam imported approximately 8.225 million tons of finished steel, with a value of over 5.969 billion USD, marking a significant 47.88% increase in volume and a 25.15% rise in value compared to the same period in 2023.

Regarding exports, in June 2024, Vietnam exported approximately 988,000 tons of steel, an 11.61% decrease from May 2024 and a 1.83% drop from the previous year in terms of export volume. The export value reached over 738 million USD, a 7.41% decrease from the previous month and a 9.29% decline from June 2023.

In the first six months of 2024, Vietnam exported approximately 6.493 million tons of steel, a 20.55% increase from the previous year. The export value reached 4.777 billion USD, a 12.23% rise compared to the same period in 2023.