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Steel prices fall on surplus
The retail steel price inched down by several hundred thousand dong per tonne for the first time since mid-February and now fluctuates between VND13.8 million to VND16.7 million, industry insiders said.
However, the retail price is about VND700,000 per tonne, higher than the ex-factory price, said Tuan Anh, deputy general director of the Viet Nam-Australia Steel Company.
Industry insiders said steel retailers had to sell their reserves to retrieve capital following a period of speculation. The price cut is also attributed to a sharp drop in demand in April.
According to the Viet Nam Steel Association (VSA), steel producers reported that sales in April were down by roughly 100,000 tonnes against March.
Experts expect that steel producers will have to cut prices due to decreasing demand in April. The ex-factory steel price has remained unchanged since mid-April.
Since early March, the retail steel price surged six times, from roughly VND12.4 million per tonne to more than VND16 million in just a few weeks. In addition to a rise in the global price of steel ingots, VSA Chairman Pham Chi Cuong attributed the sharp rise in the domestic market to speculation.
The VSA chariman said that there was no shortage of steel. Domestic capacity for construction steel is currently more than 7 million tonnes per year. Meanwhile, domestic demand for the product is just around 5 million tonnes.
Steel producers also held reserves of about 200,000 tonnes of finished products and nearly 530,000 tonnes of steel ingots, the VSA chairman said, adding that these volumes together with steel imports were more than adequate to meet demand in the coming months.
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