Prices of steel and construction materials go down

In recent months, there has been a sharp decline in the consumption of steel from enterprises under the Vietnam Steel Association. Their total sales in July dropped to only 250,000 tonnes and are expected to slump in the following months.

Currently, the selling prices of steel stay at VND17.3 million per tonne and tend to go down. Chairman of the Vietnam Steel Association Pham Chi Cuong attributes the decline in steel consumption to the slow construction tempo in the rainy season. In addition, global steel prices are also declining in tandem with low crude oil production due to economic slowdown. In the past two weeks, the prices of steel and steel ingots have dropped by 20-30 percent compared to about two months ago. Moreover, the price of iron in the world market has also dropped sharply from US$230 to US$180 per tonne.

Mr Cuong says the price of steel in the northern region is VND1 million per tonne lower than in the southern region as the production of steel ingots is facing a lot of difficulties. Enterprises cannot export their products as the export tax on steel ingots is high (20 percent) and many local businesses have no demand for ingots. According to leaders from Van Loi Cast Iron and Steel Company, since early August, the volume of ingots in store has reached thousands of tonnes, making it impossible for producers to get a return on their investment.

The prices of other construction materials are on the decline. Notably, bricks have dropped from VND1,700 to VND1,000/piece.

The price of cement has remained stable at VND900,000 per tonne in the northern region but tends to go down in the southern region following the Government’s decision to control the prices of coal an electricity. The 30 percent decline in cement consumption in recent months will lead to a decrease in output.

Consumer goods

The prices of consumer goods at supermarkets continue the downward trend. Since the second week of August, Big C has reduced the prices of many items by 38 percent for 40 electronic and household electric products, by 15 percent for 50 cosmetic products and by 32 percent for 50 garment products.

The Pico Plaza supermarket has also offered a series of products at attractive prices, such as LCD Full HD Samsung 46 inch (VND26.9 million/unit) and LCD 32 inch (VND10.79 million/unit).

Duong Thi Quynh Trang, a manager of Big C says that the market remains stable with many goods likely to go down.

Saigon Petro claims that the company is facing difficulties as the purchasing power has decreased sharply by 30-35 percent in recent months. In late July and early August the price of gas went down three times. Saigon Petro and many other gas trading companies are planning to reduce retail prices by VND5,000-6,000 per tank.

Prices of electronic and electrical equipment also drop

Electronic products are flooding supermarkets in Hanoi. August is considered a month to sell out all electronic products in stock. However, retailers say that many new products are still off the shelf due to low consumption demand. Among them are LCD TV sets, laptops, fridges, and air conditioners.

Hoang Tho Xuan, head of the Policy Department under the Ministry of Industry and Trade says that both domestic and world markets are promising. Recent floods in the northern provinces may have a certain impact on some basic commodities but the prices of most products are likely to remain stable in the next few months.