HCMC – Domestic steel demand have plunged, leading producers to sit on huge inventories.
Output of finished steel products totaled over 2.4 million tons in September, down 23.41% against August and up 1.7% year-on-year, the Vietnam Steel Association (VSA) reported. Of the total, steel sales were around two million tons, down 7.19% over the previous month and 9.9% versus the same period last year.
Meanwhile, construction steel output rose to 1.1 million tons, up nearly 12% over August and 47.2% year-on-year. However, sales took a nosedive, at around 920,000 tons, down 21.91% versus August, while exports plunged 47.9% against the year-earlier period.
According to VSA, the industry outlook improved in late August. Still, steel manufacturers were at risk of huge losses due to the a decline in domestic demand for steel and a plunge in exports.
At the end of the second quarter, inventories of 15 leading steelmakers accounted for 95% of the stocks of the whole industry, with 10 of them reporting unsold goods worth over VND1 trillion.
Volatile raw material prices and low demand have made life difficult for steel manufacturers, VSA reported, forecasting steel sales would slide further.
SSI Research estimated after-tax profit of HPG in the third quarter stood at VND2.1 trillion, plummeting by 80% over the same period last year.
It also forecast HPG’s business performance would improve in the fourth quarter, but it may record negative profit growth until the first quarter of 2023.