Nguyen xuan phuc

A cut of steel prices from Vietnam’s major steelmakers will drive up the domestic market in the next months.

Vietnamese businesses are hoping to maintain stable prices of steel products from now on until the end of this year after the market has witnessed a decline in prices in recent weeks.

The cut of still prices announced by the local major steelmakers on June 9 is seen as a poke to push back the stagnancy of the steel market, which had had a price hike since late 2020.

Steel production at Siam Steel Vietnam. Photo: Hai Linh

Hoa Phat Group quoted the price of rolled steel model CB240 at VND17.2 million (US$750) per ton, down by nearly VND1 million (US$43) from the peak at VND18.3 million (US$794) recorded one month ago, while the price of steel bar also decreased by VND500,000-700,000 (US$21.7-30.3) per ton.

Prices of rolled steels produced by Viet Duc steel are also cut by VND960,000 (US$42) per ton against early June to VND17 million (US$738).

Vice Chairman of the Vietnam Steel Association (VSA) Do Xuan Chieu said lower steel prices in the domestic market was due to the decline in prices of input materials, including iron ore, steel ingots, which make up 70-80% of the list prices.

Chieu referred to the fact that most-traded September iron ore on China’s Dalian Commodity Exchange ended at the lowest point since June at US$173.03 per ton, while the July contract for iron ore on the Singapore Exchange also declined by 2% to US$173.03.

“A stagnant in steel demand from the Chinese market has led to prices decline,” said Chieu.

In the Vietnamese market, VSA Chairman Nghiem Xuan Da attributed freezing construction activities as in the rainy season in June and July to low demand for steel.

According to Da, the peak season for construction would normally fall in the first and fourth quarters of the year.

“The declines, however, remain modest at around 3-5%, as steel prices are expected to go up as construction activities heat up,” he noted.

A recent report from Fitch Solutions suggested global steel prices would reach US$800 per ton in the final half of this year, an increase of US$140 per ton against its previous forecast, pointing out an imbalance between supply and demand.

Fitch Solutions experts have also said that the decline in steel prices would be insignificant as consumption demand is forecast to go up.

Steel prices are predicted to moderate to around US$600 per ton by 2022, stated Fitch Solutions.

Halt on increasing steel prices

To further halt the steel price hiking, Da from the VSA noted that along with keeping operational costs at an efficient level, local steel producers should prioritize domestic markets as measures to prevent steel prices from surging.

“Policies from the government are needed to temporarily discourage steel exports,” Da said.

At a recent meeting with local steel producers, Minister of Industry and Trade Nguyen Hong Dien stressed the necessity for local firms to focus on iron ore mining and processing, in turn creating stable supplies of input materials for steel production.

“Vietnamese steel producers should pay more attention to the R&D process to better ensure the supply sources and produce higher quality steel products,” he added.

Economist Vu Dinh Anh told The Hanoi Times that as steel prices are driven by the market, construction companies should draft plans to keep a hold on steel supplies to minimize impacts from rising steel prices.

“The government can only intervene when there is a major disruption to the local market,” Anh said.

Bac Giang lychee has been shipped to more than 30 countries.

Vietnamese Minister of Industry and Trade (MoIT) Nguyen Hong Dien on May 25 discussed measures for the consumption of lychee in Bac Giang, the lychee hub of Vietnam.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien at the meeting on May 25. Photo: MOIT

The discussions were crucial for Bac Giang which tops the country for the number of Covid-19 infections in the fresh wave of coronavirus with 1,400 cases.

MoIT held the meeting with Bac Giang’s authorities following the request made by Prime Minister Pham Minh Chinh who said that the ministry needs to take all measures to facilitate the consumption as lychee gives high economic values.

According to Chairman of the Bac Giang People’s Committee Le Anh Duong, Bac Giang has more than 28,000 ha, mostly in Luc Ngan district, yielding around 180,000 tons in this season that lasts from May 20 to July 20.

Duong said the lychee turnover likely reaches VND7 trillion (US$304 million).

Minister Nguyen Hong Dien said the ministry will facilitate domestic consumption, export, and e-commerce.

Lychee in Luc Ngan district, Bac Giang. Photo: Do Huong/VGP

In early May, the Ministry of Public Security agreed to allow the entry of 190 Chinese traders to buy lychee in Bac Giang. China is the traditional market of Luc Ngan lychee.

To keep the lychee hub safe from Covid-19, Luc Ngan has set up checkpoints at the entrance gates to tighten control on visitors, mostly traders and workers coming for lychee transactions. The local authorities will also disinfect all lychee batches before the shipment.

Notably, each pack will be labeled certificate of origin and phytosanitary certificate.

Vietnamese lychee is a favorite fruit of Chinese customers. The majority of Vietnam’s lychee, which is also grown in Hai Duong province and other parts of the country, is exported to China.

So far, Vietnam’s lychee has been shipped to more than 30 countries, including France, Germany, the Netherlands, Russia, Japan, Canada, South Korea, the US, Australia, Singapore, Malaysia, and Thailand.

Luc Ngan lychee has been awarded geographical indication (GI) by the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF), the first product of Vietnam to win such certification in Japan.

Vietnam ranks third worldwide for the volume of lychee with approximately 380,000 tons/year, behind China with two million tons/year and India 677,000 tons/year.

Tran Van Trung, Director of Anh Khoa Seafood Company Limited in Ca Mau Province, said that the prolonged Covid-19 pandemic affected shrimp exports, as some countries controlled imports more strictly. Therefore, goods have to wait a whole month for the host country to take samples for quarantine after being brought to the ports, leading to higher costs.

However, thanks to the initiative and good adaptation, from the beginning of this year to now, the company’s shrimp exports have increased significantly compared to the same period last year. It is expected that the company’s exports will be 2-3 times higher than the previous year.

As one of the longtime enterprises in the shrimp industry, which also faced many difficulties due to the Covid-19 pandemic, Mr. Nguyen Minh Tuan, the representative of Minh Cuong Seafood Processing Joint Stock Company, said that shrimp exports of his company grew fairly well in the first months of this year. Currently, the company tries to maintain production and export and implement strict Covid-19 prevention measures, with the determination not to let the disease enter the factory.

According to the Department of Industry and Trade of Ca Mau Province, by the end of May this year, the province’s shrimp exports were estimated at more than US$423 million, achieving 40 percent of this year’s plan, up more than 16 percent year-on-year. In Bac Lieu Province, the total export turnover of shrimp products in the first five months of this year was estimated at $280 million, up more than 9 percent over the same period. In other provinces in the Mekong Delta, shrimp exports also grew positively compared to the same period last year.

Along with exporting, many shrimp farming households in the Mekong Delta continue to expand production and stabilize their lives. Mr. Pham Van Quan, a farmer in My Long Nam Commune in Cau Ngang District of Tra Vinh Province, said that a few months before, the price of black tiger shrimps sized 30 pieces per kilogram was up to VND200,000-VND220,000 per kg, which now has decreased to about VND170,000 per kg, and that of white-leg shrimps sized 30 pieces per kg is at VND130,000-VND140,000 per kg. At this price level, farmers still ensure profits.

Farmers harvest shrimps in Soc Trang Province. (Photo: SGGP)

According to the Vietnam Association of Seafood Exporters and Producers, seafood exports reached roughly $790 million in May this year, up 24 percent. Seafood exports in the first five months of this year hit $3.27 billion, up 14 percent year-on-year. Of which, shrimp exports reached $1.33 billion, up 14 percent year-on-year. This is an impressive result at a time when many other agricultural products are struggling with consumption.

Many potential markets

Mr. Nguyen Quoc Toan, Director of the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development, said that Vietnamese seafood exports are recovering. Specifically, in the first five months of this year, Vietnamese seafood products had been exported to over 120 markets, with the US, Japan, the EU, China, South Korea, the ASEAN, and Australia being the seafood export markets with the highest value.

As for shrimp products, the advantage is that the global import demand is increasing heavily, especially in large markets. Meanwhile, shrimp supply from some countries, such as India, Thailand, and other suppliers, has been reduced due to the negative impact of the Covid-19 pandemic. Taking advantage of this, Vietnamese enterprises have accelerated shrimp exports in the first months of this year and got good results.

It is forecasted that in the coming time, the US will continue to be a market with good growth for Vietnam’s shrimp products. Vietnamese enterprises also expect to increase shrimp exports to the EU, mainly white-leg shrimps. As for the South Korean market, there are also good signs of recovery and positive economic growth, so seafood trade with Korean enterprises will be more vibrant in the coming time.

Other markets, such as Australia, Canada, the UK, and Russia, will continue to be new potential markets because demand increases and there are no uncertainties or market barriers.