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Steel prices plunge, becomes unmarketable   2010-05-11 - VnExpress

After sharp price increases, the steel price in Hanoi has dropped dramatically by 300,000-500,000 dong per ton. Buyers are delaying purchase plans and steel companies cannot find buyers.



Retail shops on Lang, Truong Chinh and De La Thanh only receive a few buyers each day. Hao Yen Shop reported that the steel price has dropped by 10-20 percent in comparison with the beginning of 2010, while the sold volume has decreased by 30-35 percent.


“In late March and early April, we had some ten buyers a day. Now, there are only one or two visitors a day,” a shop owner estimated.


According to Trinh Thi Hoa, Director of Hong Thai Trade Company, sales have been going more slowly since mid-April. Hoa noted that, last month, she sold some ten tons of steel to sell a week, while in the first week of May, she sold only 2-4 tons.


Hoa explained that the steel price has decreased sharply, dropping four times in just 10 days. “As the price is on the decline, we have to push sales and we dare not to hold  large stocks,” Hoa confirmed. “It is quite difficult to predict economic performance, so we try to sell steel as soon as possible, fearing prices may drop further.”


Minh Thanh, a buyer, spent time checking prices at different shops and found out that the prices are quite different, with gaps of up to 100-200,000 dong per ton. Thanh related that one week ago, he purchased steel at 14 million dong per ton, but the price has plummeted to 13.5 million dong. “I think that prices will drop further, so I will not purchase steel in large quantities right now,” he revealed.


According to the Vietnam Steel Association, since May 7, they have received notices on easing prices from member companies, including Southern Steel Corporation, Pomina and Vinakyoei. Steel producers have announced price decreases of 300,000-500,000 dong per ton. Construction steel is now hovering around 13.6-14.1 million dong per ton.


Pham Chi Cuong, Chair of Vietnam Steel Association, observed that, in April, the volume of steel sold was 300,000 tons, a decrease of 270,000 ton from March. Well known brands have seen sales of their products fall by 35-60 percent. Thai Nguyen steel sales, for example, have declined by 60 percent.


According to Cuong, the rainy season is nearing, so sales will continue to drop.


Also according to Vietnam Steel Association, some 120,000 tons of construction steel have been imported to Vietnam this year from ASEAN countries. “Ingot steel in the world market has dropped by $20-30 per ton. Meanwhile, consumption in the domestic market has decreased and domestic producers must compete fiercely with ASEAN-sourced products. This means that steel prices will not rise in the time to come,” Cuong asserted.


He went on to say that steel price decreases are inevitable, because prices were overly high in March and unaffordable to many clients.

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