STATISTICS OF STEEL PRICE IN CHINA, VIETNAM AND OTHER REGIONS IN THE WORLD

STATISTICS OF STEEL PRICE IN CHINA, VIETNAM AND OTHER REGIONS IN THE WORLD

                                                                                                            (Source: steelhome.cn)

Chart 1: Steel Product – HR Plate/coil – Structural steel price index in China

Unit: CNY / ton

Exchange rate: CNY 1= US$ 0.155

The line graph illustrates the steel price index of HR Plate/coil, structural steel and other steel products in general in China which were recored over last 5 months from Jan 1^st, 2021 to May 14^th, 2021.

Overall, the price index of steel increased over the period given. At the start of the period, prices of types all steel were stable before starting to rise significantly from 21/02/10. In detail, the price index of HR plate/coil were around US$ 700 / ton but after 21/02/10, the number surged from US$705 / ton to US$ 1002 / ton on 21/05/14, which equals to 42.13% of increase. The price of structural steel in China were going parallel to the trend of HR plate / coil, which is growing rapidly from US$ 787.25 / ton to US$ 1002.58 / ton, which is 27.35% increase on the same period. On average, from the start of 2021 to the present, the price of steel products in China have been rising about 40%.

There are many reasons for the rising trend of steel price, including:

• The high demand from infrastructure construction and building industry of China and other nations after the recovery from COVID – 19; increasing demand from trending industry, such as electric vehicle, renewable energy (solar, wind energy). As reported, 70% of iron ore transported by sea is being shipped to China.
• Negative China – Australia relation causes iron ore price hit record, result in the emerge of production cost in China.
• In addition, Beijing announced new policy to harness the steel capacity for environmental purpose also triggers the scarcity of steel.
• Finally, due to the sudden increase in the number of iron ore derivatives contracts being traded globally. It is not known whether there is a phenomenon of speculation or not, but investors are flocking to trading derivatives contracts a lot, also pushing up iron ore prices.

It can be foreseen that the long-term outlook for metal trading prices is "too good" and prices might potentially move higher over the next quarters.

                                                                                               (source: Collected)

Chart 2: Steel Product – HR Plate/coil – Structural steel price index in Vietnam

Unit: USD / ton

Exchange rate: US$ 1 = VND 22.930

Not out of the trend of the world, the price of steel plates and structural steel in Vietnam market has also increased sharply since the beginning of 2021. Specifically, from January 29^th, 2021 to May 14^th, 2021, the price average hot rolled coil products increased from US$ 698 / ton (VND 16 million / ton) to US$ 998 / ton (VND 22.88 million / ton), equivalent to an increase of 43%. Similarly, in the same period, the average finished structural steel price increased from US$779/ton, 2021 to US$1040/ton, representing an increase of 33.5%.

Steel prices in Vietnam have increased sharply in the last 6 months, mainly due to export demand to China and international markets. On the other hand, due to being highly appreciated by the international community in controlling the spread of the COVID-19 pandemic, FDI inflows into Vietnam also increased, leading to a sharp increase in demand for industrial construction steel.

Although steel prices are in a strong uptrend recently, steel prices in Vietnam are still among the countries with the lowest steel prices in the world. According to statistics, as of May 14, 2021, the price of hot rolled coil steel in the European market is 1.2 times higher and the US market is 1.5 times higher than Vietnam.

Chart 3: Global HR coil / plate average price

Unit: USD / ton

Exchange rate: US$ 1 = VND 22930