The price of construction steel soared threefold in one month. Photo: Hoa Phat Steel

The price of construction steel has climbed threefold in only one month, by between $42.64 and $60 a tonne. The price per tonne of Vina Kyoei Steel jumped to approximately $30. Currently, a tonne of the firm's D10 CB300 and CB240 steel costs as much as $664.

Hoa Phat Steel also increased the price per tonne of CB240 coil by $22. Currently, the selling price of this steel brand's CB240 coil and D10 CB300 rebar in the northern regions is between $660 and $662 per tonne.

Numerous analysts said that the rise in steel prices was attributable to the influence of raw material costs and not market demand. A spokesperson for the Vietnam Steel Association (VSA) said that the price of steel increased when the price of coke rose to $282.50 per tonne, an increase of $52 per tonne compared to December 2022.

Suppliers and agents said that steel prices are expected to continue to rise in light of the fact that global prices are continuing to rise for key manufacturing resources, such as iron ore, with no indication of a slowdown.

According to the VSA, the current spike in steel prices may be attributed to three primary causes.

Firstly, the price of iron ore rose. According to the VSA's study on the Vietnam's steel market in December 2022 and 2022, iron ore prices traded on January 6 between $116.95 and $117.45 per tonne at China's Tianjin port, an increase of around $6.5 per tonne from the beginning of December 2022.

Secondly, coal prices continue to grow. Steel prices are impacted by the price of coal. On January 6, the export coking coal price at an Australian port was around $282.5 per tonne freight on board, a significant rise of $52.25 per tonne compared to the beginning of December 2022.

Thirdly, the price of scrap steel has soared. In recent months, scrap steel prices have continually grown. In December 2022, the price of domestic scrap steel climbed by 21 to 40 cents per kilogram and hovered between 38 and 40 cents.

Similarly, the cost of imported scrap steel continued to increase. The price of scrap steel at the port of Dong A was between $402 and $405 per tonne on January 6. Previously, the price of imported steel soared to $400 per tonne by the end of December 2022.

The continuous stagnation of steel production on the Vietnamese market has a negative impact on steel production. According to figures from the VSA, steel output totalled 29,339 million metric tonnes in 2022, a decrease of 11.9 per cent compared to 2021.

The VSA predicts that steel manufacturers will continue to encounter a number of challenges this year as building demand declines and raw material costs rise.