The Kingdom imported 584 tonnes of steel from Vietnam in the first five months of 2021, down 1.5 per cent year-on-year, Vietnamese media outlet VN Express reported.

Vietnam shipped 4.88 million tonnes of steel abroad valued at $3.61 billion in the January-May period, up 61.6 per cent and 117 per cent year-on-year in volume and value, respectively, VN Express said citing the General Department of Vietnam Customs.

Cambodia lagged far behind the biggest buyers of Vietnamese steel – China (1.1 million tonnes), the EU (713,000 tonnes) and Mexico (293,000 tonnes).

The Ministry of Industry and Trade reported that steel prices in Vietnam have risen 40-50 per cent since the beginning of 2021, according to VN Express.

The head of marketing at a major importer of Vietnamese steel, who asked not to be named, told The Post on August 11 that the number of orders placed with the company had fallen sharply in 2021 from the year before, and that the firm was limiting sales to existing construction projects.

He said the current lull was due to the fact that about 70 per cent of his company’s customers are foreign investors, and the Covid-19 crisis has dissuaded or made it difficult for them to travel across the country, leading to delays in construction projects.

But businesses with local investors as customers are humming along as usual, he said. “Currently, only projects under construction still order small quantities of steel from the company, but almost all new projects – that have been studied and have already agreed to place orders with the company – have decided to postpone.”

At the same time, he said, steel prices in international and domestic markets have also increased significantly over the past year, with some types of steel prices up 40 per cent over 2020 rates.

“I think the current rise in steel prices may be due to a number of factors, such as a shortage of raw materials, a drop in labour, and the opening of a steel plant, the Covid-19 crisis, trade disputes among large countries, rising taxes and especially rising shipping costs,” he said.

San Sarik, sales officer at RS Group Cambodia, which operates a steel plant on National Road 51, said the steel market has not been as active in 2021 as in the years before, and prices have risen some 20 per cent year-on-year, on the back of surging costs of raw materials and growing shipping rates.

“Right now, his company’s wire rod is priced at around $680-690 per tonne, up from about $580 last year,” he said.

He said the market was likely to recover as the Covid-19 epidemic tapers off, and the construction sector would be on its way to a continuous recovery.

Cambodia Constructors Association general manager and secretary Chiv Sivpheng previously told The Post that the drop in demand for steel in the construction sector was largely due to the spread of Covid-19, which threw some construction projects off schedule and compelled others to completely suspend operations.

He said the slowdown in construction was also reflected in the decline in the value of new projects approved by the Minister of Land Management, Urban Planning and Construction over the past year.

“We recognise that imports of construction materials and capital investment in the construction sector have declined during the Covid-19 pandemic period, especially large foreign-invested constructions. However, there will be a recovery when the Covid-19 outbreak is under control,” he said.

Statistics from the Ministry of Commerce show that in 2020, Cambodia imported a total of $403.63 million worth of steel, down 27.52 per cent from $556.85 million in 2019.