Steel producers in Vietnam are collecting vast profit increases of about 30-40 times in Q1 on steel price surges and strong demand. Steel producers are also benefiting from the recovering real estate market, foreign investment, and public infrastructure spending.
The profit rush has happened in tandem with limited material availability from China and India as the global economy mends from the COVID-19 pandemic. The cost of material has increased 30-40pc since the beginning of March and is anticipated to continue upward through Q3, according to reports.
Me Lin Steel posted a Q1 2021 after-tax profit increase of 41 times against the prior-year period at VND15.5bn ($672mn) on rising steel prices near the end of 2020 and cost reductions, per media reports.
Tien Len’s after-tax profit surged 30 times in Q1 year-on-year to more than VND120bn and already reached its half-year goals. Thai Nguyen Iron and Steel recorded its highest Q1 profit in the past three years at VND44bn, following numerous shortfalls.
Hoa Phat’s March sales reached a new record of 1mn mt, a monthly high for the company, however, has not yet issued its financial results.
Hoa Sen posted an increase of nearly 382pc in Q1 compared to the prior-year quarter, with a net revenue of VNĐ9.1tr, leading to a rise of 215.8pc in profit after tax to VNĐ572bn. The gain was due to net revenue increases and financial cost cuts.
Hồ Chí Minh City Metal also witnessed strong results during Q1 with revenue up 40.4pc against the same 2020 period to about VNĐ1.1tr. The company’s profit increased more than 10-fold versus 2020 to VNĐ64.7bn, marking its highest quarterly profit ever.
Thu Duc Steel’s quarterly results indicated net revenue increased 22.7pc in Q1 2021 compared to 2020 to VNĐ601.6bn. Profits also gained 45.5pc to over VNĐ12.8bn. The company’s steel consumption increased to over 1,760mt in Q1 while steel prices continued to recover.
Rebar futures contracts trading on Shanghai’s Futures Exchange also rose dramatically due to supply chain disruptions caused by COVID-19. The most highly traded rebar contract in May increased 17.4pc this year to move at CNY5,101/mt ($784.53/mt). The rebar price rose 51pc compared to April 2020 levels.
($1 = VND23,079)
($1 = CNY6.50)