Hoa Phat construction steel sales down three months straight

By Minh Son July 12, 2021 | 06:28 pm PT

A worker transports steel pipes in a factory of Hoa Phat Group. Photo courtesy of Hoa Phat Group.

Construction steel sales of the Hoa Phat Group, a leading producer, have declined for three consecutive months, after reaching a peak in March when steel prices surged.

In June, Hoa Phat produced 658,000 tons of raw steel, a year-on-year increase of 49 percent. It sold 569,000 tons of finished products, including 230,000 tons of construction steel and 230,000 tons of hot-rolled coils. The sales of construction steel was the lowest volume in the last four months.

In March, the group had made its biggest-ever monthly sales of over one million tons of steel products, including nearly 480,000 tons of construction steel. Its sales of construction steel, hot-rolled coils and steel billets all surged over 30 percent over March 2020.

The group says sales of construction steel and steel tubes in June dropped against May 2021 and June 2020 mainly due to the impacts of the fourth wave of Covid-19 nationwide, especially in HCMC and southern provinces. Besides, the rainy season has started, weakening demand for construction steel.

In the first half of this year, the group sold 1.8 million tons of construction steel, up 22 percent on-year.

After a sudden surge in the beginning of this year, steel prices have kept declining in the last few weeks in Vietnam, mostly because of a fall in world steel billet prices, especially China.

Many construction contractors said the prices of domestic steel products were still high, cutting deep into their profits. Steel costs account for 10-30 percent of a construction project.

According to the Vietnam Steel Association, the decrease in steel prices will slow down in the coming time and could even go up. To stabilize prices, the association has advised Vietnamese steel producers to limit exports and increase supplies of hot-rolled steel and raw steel in the domestic market.

Vietnam produced nearly 12 million tons of steel products of different kinds in the first five months of this year, a year-on-year rise of more than 38 percent, while exporting nearly 2.8 million tons, up 80 percent.

The country exported 1.1 million tons of steel to China in the five-month period, twice that of last year, according to the General Department of Vietnam Customs.