Is the increase in construction iron and steel prices ominous?
Is the increase in construction iron and steel prices ominous?
Is the increase in construction iron and steel prices ominous?
(Construction) – The price of construction steel is increasing at the highest level in recent years, which is mainly due to the rising price of raw materials imported from China
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Risk of commodity speculation with the expectation of price increase
Report of the Vietnam Steel Association said: Construction iron and steel prices in January - February 2018 increased due to the influence of imported ore prices in the last days of December 2017 due to increase in China market. Specifically, the price of steel billet increased by more than 3%, iron increased by 7-8% compared to before. In addition, the increase in the price of electrode coal for factories using electric furnace technology makes the price of finished steel products increase by 500,000 - 600,000 VND/ton, leading to an increase in the selling price of finished products.
An construction iron and steel material shop owner in Thanh Nhan street said: “In the past 2 months, steel prices continuously increased. In early January, increased by 100,000 VND/ton, then increased by 500,000 VND/ton in February.”
Currently, construction steel price is at 15.3 million VND/ton. This increase is said to be quite high, because compared to the time when steel prices peaked in 2017, the current price is higher than 1 million VND/ton. This is also the highest increase in recent years.
In fact, the construction steel market in recent days shows that, at steel dealers and distributors, the number of orders has increased dramatically, many places are no longer enough to supply customers.
Some customers, knowing that iron and construction steel may continue to increase in price in the near future, have ordered a large quantity, causing a shortage of supply. Some dealers said that the price will continue to rise, so they actively speculated goods to wait for the price increase
Experts forecast that in the coming time, the price of input materials for iron and construction steel production will continue to increase, so the selling price of this item may increase by 300,000 - 500,000 VND/ton in the last days of the month. In the first 3 months of April 2018, it will even increase until the end of May 2018.
Exports increase in both volume and price
According to the latest statistics of the General Department of Customs, by the end of February, the whole country exported 919,771 tons of iron and steel of all kinds, with a total turnover of nearly 655.3 million USD. Thus, on average, each ton of exported iron and steel costs 712.4 USD.
Up to now, the United States is one of the major export markets of our country's iron and steel products, and the average export price to this market is much higher than the national average.
Compared to the same period of 2017, iron and steel exports increased by 39.7% in volume and 59.2% in value. In which, the United States along with Cambodia, Indonesia and Malaysia are the 4 largest export markets with output in the first two months of the year reaching over 100,000 tons each.
The largest is Cambodia with 168,037 tons, turnover of 105.23 million USD; Indonesia 134,317 tons, turnover of 100.36 million USD; US 124,573 tons, turnover reached 104.23 million USD; Malaysia 114,363 tons, turnover of 73.85 million USD.
Thus, in the key markets mentioned above, the United States has the highest average export price of 836.8 USD/ton, while Cambodia is 626 USD; Indonesia is 747 USD tons; Malaysia is 645.7 USD. The average export price to the US is also 124.4 USD/ton higher than the national average (equivalent to about 2.8 million VND).
With a total output of 541,290 tons, these four key markets accounted for nearly 59% of the country's total steel export output in the past two months, and the total turnover of the four markets (reaching nearly $384 million) accounted for about 58. .6% market share and turnover of the country.
Compared to the same period of 2017, iron and steel output exported to the US increased by nearly 110%, while the turnover increased by nearly 120%. The fact that the growth rate of turnover is higher than output helps the average price of iron and steel exports to the US also increase by nearly 37 USD/ton (about 800 USD/ton in the same period in 2017). In addition to iron and steel of all kinds, 2 In the first month of 2018, the whole country exported nearly 74 million USD of iron and steel products to the US market, accounting for 16.7% of the total export value of this item of the whole country during the same period.
A construction economist said that the increase in construction iron and steel prices will certainly affect the construction sector, however, to what extent, it should be carefully considered. If the increase is over 10%, exceeding the enterprise's provisioning capacity, it needs to be recalculated.