Will steel prices in 2022 increase?
Some experts believe that the steel price level will continue to stay at a high level, at least in the first half of 2022.
The steel industry has just had an exciting year when prices increased by more than 40% compared to the beginning of the year, although domestic consumption slowed down because of the Covid-19 pandemic. By December 2021, the price of construction steel, although slightly decreased by 200-300 VND/kg, still stood at 15,900-16,000 VND/kg. Many enterprises in the industry such as Hoa Phat, Hoa Sen, Nam Kim had a speedy year thanks to rising selling prices and boosting export channels. The question is in 2022, how will steel prices change?
Some experts believe that the steel price level will continue to stay at a high level, at least in the first half of 2022. The reason is that many real estate projects that are in the process of being deployed have been postponed due to the impact of relaxation. social distance, but from the beginning of next year, these projects will be quickly implemented to meet the progress requirements committed with customers. 2022 will see many large-scale public investment projects start construction, especially the North - South expressways, Long Thanh international airport and ring routes... will help the amount of steel consumed. Strong recovery in the period of adaptation to the Covid-19 pandemic. In general, the positive signals from public investment momentum and the recovery of the real estate industry across the country will help the steel industry continue to be active.
In the world, except for China, which is witnessing the trend of steel consumption slowing down because of the government's orientation to reduce carbon emissions, major economies such as the US, EU, Japan... are returning. The growth trajectory will lead to the demand for steel consumption, especially in the key fields of construction and automobile assembly. The increase in input material prices of steel mills (along with the increasing trend of oil prices) makes it difficult for finished steel production costs to reduce heat. For example, the price of coke from the beginning of 2021 has continuously increased due to the sharp increase in energy demand from countries. In the long-term future, experts believe that coal prices will gradually cool down, but will still be at a higher level than before.
According to Mr. Narendran, CEO of Tata Steel Group, said that by the end of 2021, the average price of hot-rolled coil (HRC) is about $400-450/ton, but in the long-term, this HRC steel price may be reached a higher level as supply from China slowed down. "I expect the price of steel in the long-term to rise to the threshold of $ 600 / ton, of course the price can be more volatile and volatile than we have seen in the past," Mr. Narendran emphasized.
Indeed, the steel market is undergoing a number of structural changes, including rising production costs and an increasingly new role for China. At its peak, China exported more steel than India produced. But later on, the world's second-largest economy's steel exports halved, to 60 million tonnes a year, and could fall further if Beijing pursues a strategy to reduce greenhouse gas emissions. Moreover, for the first time, in many years, global steel demand will no longer depend on China. Although, in the context of Western countries promoting investment in infrastructure, steel demand may increase higher. Vietnamese steel enterprises are trying to take advantage of opportunities from export channels. According to data from the Vietnam Steel Association (VSA), iron and steel exports have increased since the first months of 2021, due to trade agreements such as CP-TPP, the Vietnam-EU FTA, which will help Vietnamese steel have a competitive advantage. painting. Major domestic manufacturers such as Hoa Phat, Ton Hoa Sen or Nam Kim all achieved impressive export figures. Vietnam's iron and steel products are mainly exported to ASEAN, China, EU, and US markets.
It is forecasted that in the second half of 2022, the steel price level may be more stable when the supply disruption is gradually resolved, helping to lower the cost of transporting raw materials and steel products. At the same time, steel mills will increase output to solve the problem of product shortage. VNDirect Securities Company forecasts that Vietnam's construction steel price is likely to fall to VND 14.3 - 13.6 million/ton in 2022-2023, down 8-5% in turn compared to 2021. Besides, Accordingly, BVSC Securities Company forecasts construction steel price to drop to VND 14.5 million/ton in 2022, while HRC price is forecasted to drop to VND 17 million/ton, down 11.5% over the same period in 2022.
