Hanoi (VNS/VNA) - Steel prices have hit a new high after a series of rapidincreases from May through June 2021 when they increased by more than 50 percentcompared to the beginning of the year.

Accordingto the Ministry of Industry and Trade (MoIT), as governments aroundthe world issued economic stimulus packages of tens of trillions of dollars torevive their economies, the prices of primary materials such as oil and otherraw materials increased.

InVietnam, after a feverish December in 2020 for steel prices, MoIT announced:"The steel market has stabilised and formed a new higher pricelevel."

Pricesof finished steel products have remained at more than 16 million VND (695 USD)per tonne since the start of this month compared to June, when theprice for a tonne of finished products was 2 million VND lower. Earlier in2021, the products were listed at 24 million VND, causing lots of trouble inthe construction industry.   

Statisticsfrom the Vietnam Steel Association (VSA) said most of the raw materials forsteel production in Vietnam, except for the production of Thai Nguyen Ironand Steel Joint Stock Company of Vietnam Steel Corporation with an output ofabout 300,000 tonnes per year, was imported. The association also forecastdemand for iron ore and steel scrap for steel production would increasesignificantly in 2021 compared to 2020.

Theassociation's chairman Nghiem Xuan Da said the iron ore price in May 2021increased by 2.4 times compared to the price in February 2020. Indetail, the price increased from 86 USD to 206 USD per tonne in May. Thescrap steel price in May 2021 increased by 1.9 times compared to February 2020price, from 270 USD to 512 USD per tonne.

Thatsaid, the price of iron ore mined at Thai Nguyen Iron and Steel JointStock Company in the same period only increased by 8 percent.

Accordingto a representative of the Hoa Phat Group, the selling price of steel productsin the first five months of 2021 increased. Compared to February 2020, theprices of steel billet in May 2021 increased by 62 percent. The increase was 49percent for construction steel prices, and 94 percent for hot-rolled coilprices respectively.

TheVSA’s report said local steel production reached more than 15.9 million tonnesof all kinds in the first half, up 37 percent over the same term last year. Inwhich, steel billet reached 11.1 million tonnes, up 29 percent.

Thereport also said consumption of steel products in H1 reached more than 14.05million tonnes, up 35 percent over the same period in 2020, in which, steelbillet accounted for 10.08 million tonnes, up 29 percent over the same periodin 2020.

TheMoIT’s has estimated that the production capacity of enterprises in 2021 wouldbe stable and forecast high growth for enterprises with new investment projectsthat go into products such as the Hoa Phat Group and Nghi Son Steel JointStock Company.

Inparticular, for billet products, the Hoa Phat Group and the Nghi Son SteelJoint Stock Company in 2021 are expected to experience high growth with anexpected increase of 38 percent for Hoa Phat Group and 44 percent for Nghi SonSteel and 7 percent for Vietnam Steel Corporation.

Forconstruction steel, the department estimated that the Hoa Phat Group'sconstruction steel production output in 2021 would increase by about 42 percentcompared to 2020, Nghi Son Steel Joint Stock Company's production would increaseabout three times compared to Vietnam Steel Corporation’s output which would beabout the equivalent of 2020.

Forhot-rolled coil (HRC) products, the Hoa Phat Group was expected to produce 2.88million tonnes, an increase of more than four times compared to 2020 fromthe Hoa Phat Dung Quat Iron and Steel Production Complex that has just startedproduction.

Asan expert in the steel market, Nguyen Van Sua said the supply and demand ofsteel products will be stable this year with slower growth in the last half.

TheMoIT forecast by the end of 2021, both prices of finished steel and iron orewould be reduced from the current new prices./.