LookAtVietnam – An iron hand will come down on construction steel speculators. Vietnam Steel Association (VSA) chairman Pham Chi Cuong said local steel manufacturing enterprises were jockeying for market positions, with demand growing until July when the rainy season arrived.
Construction steel prices have increased since early March under pressure from the surge in prices for scrap and billets, fuel, power and the US dollar.
Local steel-makers reportedly raised their prices by 14-15 per cent in April against early March to around VND15.2-15.5 million ($800-815) per tonne. Retail prices stood at around VND16 million ($842) per tonne.
The Ministry of Industry and Trade (MoIT) early last week requested stable production and strict controls of construction steel prices to avoid further increases, which would seriously affect the business sector and consumers.
In an instruction document sent to local level authorities, state-run Vietnam Steel Corporation and VSA, MoIT deputy minister Nguyen Thanh Bien stressed the importance of preventing speculation and fraud.
“Speculation happens when trading firms take advantage of short supplies to raise their retail prices to make money. However, production is on the rise and we will try our best to ensure supplies for local consumption,” Cuong said.
VSA members sold nearly 570,000 tonnes of construction steel in March, up 88 per cent from the previous month. It was also the biggest growth they had ever recorded. During last March, construction steel sales from member enterprises grew 59.7 per cent.
They also reportedly had more than 200,000 tonnes of construction steel in stockpile now. VSA’s data also showed that billet reserves were at 530,000 tonnes in April, which is sufficient enough for construction steel manufacturing during the month.
“Steel sales hit record highs in March because trading firms promoted their buying for stockpiles with the expectation that prices would continue to grow later,” Cuong said.
The Market Monitoring Bureau, which involves representatives from the MoIT and ministries of Finance, Planning and Investment, predicted that steel purchasing would not be as high as in March, since trading firms already had big stockpiles.
“In fact, some trading companies had started selling their stockpiles since the middle of April, with the price a bit lower than earlier in the month,” Cuong said. VSA member companies sold a total of 1.21 million tonnes of construction steel in the first quarter of this year, up 54.4 per cent from last year’s corresponding time.