Domestic steel production and sales in the first four months surged by 38-40% year-on-year, while exports of such products also rose by 68% year-on-year, according to the Vietnam Steel Association (VSA).

Steel production in the January – April period was estimated at 10.48 million tons. File photo

Nearly 2.82 million tons of steel were produced in April, a decline of 4.8% against last month, but more than double the amount recorded in the same period of 2020, noted the VSA.

In line with the large quantity produced, the amount of steel consumption increased by nearly 57% in the month to 2.7 million tons.

Overall, steel production in the January-April period was estimated at 10.48 million tons, up 38% year-on-year, of which 9.84 million tons, or an increase of 40% year-on-year, were sold domestically.

“This shows that domestic supply remains sufficient to meet products’ demand,” stated the VSA.

In reality, however, domestic steel prices went up by 40-50% in the past months and put steel buyers under pressure. In its own report, the Ministry of Construction (MoC) said there have been abnormalities in steel prices.

For this issue, the Ministry of Industry and Trade (MoIT) attributed rising input materials costs for steel production in the global market in the past nine months.

“Vietnam’s steel industry is highly dependent on imported input materials, therefore, price hikes in the international market would lead to higher domestic finished products,” noted the MoIT, adding such price hike is not showing sign of slowing down.

Among measures to cool down steel prices in the domestic market, the MoIT is encouraging steel plants to boost production capacity and expected to tighten steel exports.

According to the VSA, iron ore was traded at US$189.4-190 per ton on May 4 at Tianjin port (China), an increase of US$20 per ton against early April. Six days later, prices of such products rose to a record high of US$231 per ton.

Meanwhile, prices of hot-rolled coils also rose by US$130 month-on-month to US$925 per ton on May 4.

“High prices of hot-rolled coils are causing difficulties for domestic steel producers, especially those who are relying on these materials for steel production,” stated the VSA.

The VSA expected steel prices to continue rising in May to offset rising prices from imported input materials.