From March 31 to April 5, the price of steel fell from $601 to $551 per tonne, according to the Shanghai Future Exchange.

Reuters reported that iron ore futures on the Singapore Exchange Limited fell again on April 4. The decline was caused by increased shipments, sluggish steel demand during the normally peak building season, and lingering fears of government intervention. After touching a one-week low of $117.05 per tonne, benchmark iron ore SZZFK3 for May delivery declined 2.11 per cent to $118.25 per tonne.

According to statistics from Hoa Phat Group (HPG), the consumption of steel goods in both local and international markets declined between 2022 and 2023. Due to a robust construction sector, steel consumption reached a record high in the first quarter (Q1) of 2022, but in Q1/2023, the market was sluggish due to a considerable drop-off in demand.

In light of the difficulties in the real estate market that became evident at the end of last year, Vietcombank Securities (VCBS) has predicted that steel demand would remain low in 2023, with construction accounting for 60 per cent of that demand. In addition, certain significant steel companies, such as HPG and Pomina Steel, have had to halt production until the Q2 this year to balance cash flow.

VCBS anticipates that the payment of backlogged projects from last year and the government's extra economic stimulus package should stimulate public investment beyond Q3/2023. However, VCBS emphasised that public investment in steel remains rather small. Steel consumption in the building industry is projected to decline by as much as 4 per cent, before recovering next year.

According to the Vietnam Steel Association, steel production in the first two months of this year totalled 4.3 million tonnes, a 16.3 per cent decrease on-year. 3.8 million tonnes of finished steel were sold, representing a fall of 23 per cent, while exports to foreign markets declined by 10.4 per cent to one million tonnes.

In the first two months of the year, crude steel consumption reached 3.1 million tonnes, a 10 per cent decrease on-year.