The Vietnam steel industry in July 2005 produced 240,000 tons and sold 210,000 tons according to the Vietnam Steel Association (VSA). For VSA members, the figures respectively were 185,000 tons and 180,000 tons, nearly 23% up from a month ago.

In January - July period, steel companies of the VSA manufactured 1.45 million tons, nearly 20% up from the same period last year. In early August, the association had a stockpile of 250,000 tons of finished steel products and 200,000 tons of steel ingots.

The above figures show abundant supply in the first 7 months of this year, which was an outcome of positive growth of the steel industry. Meanwhile, as it was raining season, the domestic demand for construction steel remained smaller than supply.

After hovering $325 – 335 per ton, steel prices in the world market have been on the rise since the beginning of July. The prices have been up by $30 per ton over the beginning of June. In late July, China steel ingot exporters offered prices of $350 – 360 per ton.

Due to hikes in steel ingot prices in the world market, prices of finished steel products widely rose by VND100,000 – 200,000 per ton to around VND7,200 per kg (for rolling steel), VND7,600 per kg (for bar steel) in the Northern region; VND7,500 - 7,800 per kg (for rolling steel) and VND7,700 – 7,800 per kg (for bar steel) in the Southern region, not including value added tax (VAT).

Forecasts said steel supply would still be abundant in August and September. Steel production of these 2 months will respectively total 230,000 tons and 240,000 tons and VSA’s stockpile in early September will be 260,000 tons. As domestic steel manufacturers have to import 70% of volume of steel ingot they need, many of them will invest in steel ingot production. However, they will then be dependent on waste steel imports for steel ingot production.

Progress of constructions will speed up in September. Volume of construction steel consumed in August and September will respectively be 210,000 and 225,000 tons.

Steel ingot prices in the world market will rise by 2 – 3% in September. However, thank to abundant supplies, steel prices in the domestic market will increase just slightly.