The implementation of many large projects and public investments for infrastructure are expected to support growth in construction steel consumption in Vietnam, according to Rong Viet Securities (VDSC).
The demand for steel pipe and galvanized steel products in Vietnam has been recovering since the beginning of May. The steel pipe segment has recovered due to domestic steel demand from housing, industrial real estate and manufacturing, while the industry’s dependence on export markets for galvanized steel has been reduced. The consumption volume for all steel products declined in the first eight months of the year, excluding galvanized steel sheets, mainly due to the coronavirus.
The Vietnam Steel Association forecasts that the domestic market will see higher steel demand in the short term after the social distancing period during the coronavirus pandemic. According to the association, domestic production and sales of construction steel are expected to improve from September.
VDSC believes that steel demand from industrial production is strong, while steel demand from the construction sector has been highly impacted by the coronavirus. New projects in the residential and commercial real estate market are rare due to reduced tourism and international trade activities against the backdrop of an international flight ban.
Meanwhile, Vietnam-based steelmaker Hoa Phat Group said it expects its new production lines at its Dung Quat complex will catch up with the recovery of steel bar demand. In this way, the company hopes to gain market share and generate profit growth in the second half of the current year and in 2021.