Steel industry forecast to grow by 10% in 2024

According to a recent report from the Vietnam Steel Association (VSA), steel consumption is expected to increase by 6.4% in 2024, reaching nearly 21.6 million tonnes. In particular, exports of finished and semi-finished steel products continue to grow, at an increase of 12% to 13 million tonnes. Overall, Vietnam's steel production outlook is likely to increase by about 10% in 2024, thanks to expectations of recovery in world steel demand.

Optimistic signal

Recently, with positive developments in consumption in the last month of 2023, many forecast that the steel industry can recover positively in 2024, thereby helping the steel industry increase its strong profit margin.

In the early days of January 2024, the domestic construction steel market had its first price adjustment when manufacturers simultaneously increased the selling price of rolled steel and rebar steel bars, with a common increase of 200,000 VND per tonne.

According to VSA, steel consumption in 2024 is expected to increase by 6.4% to nearly 21.6 million tonnes. Of which, exports of finished and semi-finished steel products increased by 12% to nearly 13 million tonnes. This target is based on the expectation that Vietnam's GDP will grow by 6-6.5% this year.

This year's strong recovery of the steel industry is established in the context of the negative impact of the macro economy and the “freezing” of the real estate market in 2023. By 2024, the steel industry is forecast to have long steps of growth, leading to the recovery of profits of businesses in the industry.

Besides, the World Steel Association (Worldsteel) also pointed out that global steel demand reached 1.81 billion tonnes in 2023 and will increase by 1.9% to 1.85 billion tonnes in 2024.

In particular, ASEAN's steel demand is expected to increase by 5.2%. Currently, ASEAN is Vietnam's largest steel export market, accounting for 32% of the export market share, while the EU and US ranked 2nd and 3rd, accounting for 28% and 9%, respectively.

Export output will also improve in the first quarter of 2024, thanks to the increasing difference between steel prices in North America and Europe and steel prices in Vietnam.

Steel industry forecast to grow by 10% in 2024

Expectations for market recovery

The VSA believed that the economy has currently recorded some bright spots in terms of policies to remove difficulties and promote economic growth issued by the Government and ministries and branches.

At the same time, the disbursement of public investment capital increased sharply in the field of transportation infrastructure from the third quarter of 2023, which has been a positive signal for the Vietnamese steel market.

Therefore, the VSA also forecasts that Vietnam's steel production prospects may increase by about 10% in 2024 and 8% in 2025, when the demand for steel in domestic economic sectors recovers.

It is forecast that finished steel production in the 2024-2025 period will reach about 28-30 million tonnes, and domestic steel consumption demand will reach about 21-22.5 million tonnes. This will help the domestic steel market prosper, and steel manufacturing enterprises will have booming profits after a long period of suffering losses and inventory.

Vietnam’s steel production prospects are likely to increase by about 10% in 2024 and 8% in 2025, when demand for steel in domestic economic sectors recovers.

Many economic experts and analysts also believe that the profits of steel companies have bottomed out in 2023 and will recover in the next 2-3 years and achieve high growth in 2024, thanks to improvement in consumption output and the gross profit margin will increase again from a multi-year low, as steel prices likely ended the downward trend of previous years.

Although the actual steel consumption demand of final consumers has not recovered as expected, this price increase in early 2024 has been predicted by experts from the end of 2023, when the price of raw materials for production increased continuously for many weeks. With the recovery momentum, it is forecast that steel prices may continue to increase right before the Lunar New Year and surpass the mark of 15 million VND per tonne.

Therefore, steel industry enterprises hope that the Government, ministries and branches will have stronger policies to support the real estate market and promote the development of the steel market in 2024.

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