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    Vietnamese rebar prices to remain high in Q3
    ----Interview with VanDinh Dao
    Deputy General Manager
    Dat Viet Steel Joint Stock Company
    Dat Viet Steel Joint Stock Company is currently the official Level I distributor in the nationwide distribution system of large construction steel factories in Vietnam. In recent years, the company has been one of the 10 largest distributors of steel and billet in Vietnam.

    Asian Metal: Hi Mr Dao, thanks for accepting the interview from Asian Metal. Please make a brief introduction of your company.

    Mr Dao: Dat Viet Steel JSC is the official 1st class distributor in nationwide distribution system of major steel factories in Vietnam. We deal with trading of steel products including rebar, pipe and plate, billets and scrap, with a monthly trading amount of 20,000-25,000t. We provide full steel supply chain including trading, warehousing, transportation and forwarding.

    Asian Metal: What steel mills are you mainly cooperating with presently?

    Mr Dao: We are cooperating with manufacturers including foreign-invested steel manufacturers include Shengli (from China) & Kyoei SteelGroup (with 3 sub-brands in Vietnam: Vietnam Italy Steel, Kyoei Steel, Vina Kyoei Steel), and with local manufacturers including Vietnam Japan Steel, Vietnam America Steel, Vietnam Germany Steel, Hoa Phat Steel.

    Asian Metal: What are your superiorities over others for trading business? Who are your major clients? What projects do you mainly supply your materials to?

    Mr Dao: Our company already archived steel distribution network (Northern, Central and SouthernVietnam). We have wide product distribution including steel products like rebar, pipe and plate, semi-finished steel like billet, as well as steel raw materials like all kinds of scraps. We provide full steel supply chain including trading, warehousing, transportation and forwarding, so that we can better serve our clients. Our products are used for different industries, mainly for civil (resident, high building), industrial (FDI) factories, and energy projects (thermal power plant, hydropower plant, wind energy, petrol chemical project). We supplied to some important projects like Lotte Mall-Hanoi, Sunshine Golden River, Central Area West Lake Urban Area (Starlake), Luxshare Factory and so on.

    Asian Metal: Please make an introduction of rebar market in Vietnam in the H1 of this year.

    Mr Dao: During Jan-Feb, rebar prices in Vietnam went down slightly from VND14,000/kg (USD610/t) Ex-VAT to VND13,750/kg (USD600/t) Ex-VAT due to softened demand from downstream customers for the Lunar New Year. After February, prices kept going up supported byrising demand and higher raw materials' prices in the global market. Prices went up to VND15,000/kg (USD654/t) Ex-VAT in March, VND17,100/kg (USD745/t)Ex-VAT in April and reached the highest point at VND17,650/kg (USD770/t) Ex-VAT in May. After that, discouraged by the sharp drop in China, rebar prices in Vietnam fell to VND17,000/kg (USD740/t) Ex-VAT in the first half of June.

    Asian Metal: What do you think are main factors which support the price increase of rebar from March to May?

    Mr Dao: Steel prices in Vietnam depends on global factors. As far as I know, Vietnam's steel production capacity is over 30 million tons per year, which includes 20 million tons of construction steel. We need to import around 3 million tons of steel scrap every year. Producers who use blast furnaces like Hoa Phat, Formosa, mainly import iron ore, ferroalloy and additives like coke. Vietnam is a neighbor country of China, which is the largest steel producer in the world. When there are fluctuations in all imported raw materials, prices in Vietnam will immediately follow the trend. Firstly, from March to May 2021, steel and raw materials' prices in Chinese and the global market kept going up sharply as the economy all over the world recovered after COVID-19 was under control on a large scale. Governments in some countries carried out a large amount of credit stimulus, creating a boost in demand for all products including steel. As a consequence, prices in China and other regions increased sharply, after that Vietnamese market followed. Secondly, Vietnam owns excess production capacity if the domestic demand is taken into consideration. It exports products such as billets and wire rods to China, USA and Philippines in large volumes every year. This year, significantly increased exports caused a shortage of billet and wire rod for the domestic market, which supported prices in Vietnam to increase accordingly.

    Asian Metal: How about the demand for rebar in Vietnam at present?

    Mr Dao: Discouraged by repeated COVID-19 and coming rainy season, demand for rebar is shrinking now in Vietnam. The demand reduced by around 30% this year compared with that in past several years. Anyhow, we predict that it would recover gradually after August.

    Asian Metal: How do you think will rebar prices in Vietnam perform in Q3 of this year?

    Mr Dao: I think prices will stabilize at VND16,700-16,800/kg (USD727-732/t) in Q3 of this year. Firstly, prices in Vietnam would not move up or down sharply on the steady relationship between supply and demand. Secondly, for now we have to specify which new level for rebar price will stay in this year. Everything has changes after the credit stimulus all over the world, price for raw materials, logistics and so on. Rebar prices would not go back to the levels at the same time in past several years and would remain higher than they were before.

    Asian Metal: What are your company's development plan in the coming year?

    Mr Dao: We aim at increasing the profit by 15% YoY in the coming year by enlarging our sales amount, search more clients and optimize our own logistics services.
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