Vietnamese Ministry of Finance (MOF) announced today that members of the Vietnam Steel Association agreed to a 15 percent price hike on
construction steel in an effort to prevent increasing losses resulting from weakening demand and rising steel inventories.
The projected 15 percent hike equals to VND 100,000 ($6.30) per ton. In the northern part of Vietnam, price of deformed bars is around VND 7.2 million ($452.80) per ton and the price of
wire rods is at VND 6.9 million ($434) per ton. On the other hand, in the southern part of the country, deformed bars are in a price range of VND 7.1-7.3 million ($446.50-459.10) per ton and
wire rods are in a price range of VND 7-7.2 million ($440.20-452.80) per ton.
Vietnam Steel Corporation, which holds a 40 per cent share in the local
construction steel market, indicated that the prices hikes are necessary in order to offset the 10-15 percent increase in the prices of imported billets, the material used to produce deformed bars and
wire rods. Imported
billet prices reached $350-355/ton in February.
Moreover, the weak demand for the
construction steel products led to a rise in the inventories. In order to reduce the stock levels, producers declined their prices; however, increasing
manufacturing costs led producers to report losses.