Widespread Decline In Construction Steel: Civil Purchasing Power Remains The Biggest Bottleneck Of The Market

The domestic construction steel market entered June 2026 with less than positive signs, as the downward price trend was no longer localized but had spread nationwide. After a prolonged period of weakness since the second half of May, low consumption pressure forced many manufacturers to adjust selling prices, while purchasing power from the residential sector – a key driver of the market – still showed no clear signs of recovery.

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Construction steel prices were adjusted simultaneously in both northern and southern regions.

The first week of June saw a notable change as the southern region initiated a price reduction with an adjustment of approximately 300 VND/kg. Shortly after, factories in the northern region followed suit, leading to a nationwide decrease in construction steel prices.

This development clearly reflects the pressure from weakening consumer demand, high inventory levels in the distribution system, and the prevailing market sentiment of waiting for further price reductions. The widespread decrease in construction steel prices indicates that the market has moved beyond the expected adjustment phase to the actual adjustment process.

In the southern region, following the latest price reduction, common construction steel coils range from 14.9 to 15.9 million VND/ton; CB300 ribbed steel bars are priced at 14.7 to 15.7 million VND/ton; while CB400 and CB500 ribbed steel bars are traded around 15.0 to 15.9 million VND/ton.

Prices fell, but trading remained sluggish.

Normally, falling prices would stimulate buying activity. However, the current reality shows the opposite. Although prices have become more attractive, trading volume in the market remains low and mainly serves actual needs.

Many dealers continue to maintain a cautious purchasing policy, only taking goods based on pre-orders instead of stockpiling as in previous periods. This is due to concerns that steel prices may continue to fall in the near future, increasing the risk of excess inventory.

This shows that the biggest challenge in the market today does not lie in the selling price but stems from the decline in actual demand, especially for civil construction. As individual housing projects and civil construction activities have not yet recovered, the distribution system’s ability to consume steel remains limited.

Construction steel production has fallen sharply after the peak period.

Production figures for May 2026 show a downward trend that had already formed before the market entered June. According to statistics from 10 major steel mills, the output of construction steel in May reached approximately 721,500 tons, a decrease of more than 21% compared to the previous month.

Compared to the peak in March 2026, construction steel production has decreased by nearly 36%. The average daily production in May was only about 23.3 thousand tons, significantly lower than the 30.7 thousand tons/day in April and 36.1 thousand tons/day in March.

These figures show that manufacturers are proactively adjusting their operational plans to balance the supply and demand of construction steel and reduce inventory pressure amidst a market that shows no signs of improvement.

The domestic construction steel market entered June 2026 with less positive signs, as the downward price trend was no longer localized but had spread nationwide.

Inventory levels and market sentiment continue to put pressure on the market.

One of the factors strongly impacting the construction steel market is the relatively large amount of inventory remaining at dealers and distributors. After importing goods at high prices previously, many businesses have yet to clear their inventory due to the rapid decline in purchasing power since the end of May.

Furthermore, the wait-and-see attitude regarding further price adjustments is leading to more cautious purchasing decisions. Trading businesses are prioritizing cash flow preservation and minimizing inventory risks rather than expanding their imports.

Although many factories have implemented programs to increase discounts, provide trade support, and encourage dealers to import goods, the effectiveness of stimulating demand remains quite limited as final market demand has not yet fully recovered.

Scrap metal prices are starting to cool down, following the decline in steel prices.

The downward trend in construction steel prices is also having a ripple effect on the input materials market. Over the past week, domestic scrap metal purchase prices have seen downward adjustments in many regions.

Some factories in the South reduced prices by about 200 VND/kg at the beginning of the week and continued to reduce them by another 100 VND/kg by the end of the week. Currently, the common domestic scrap metal price ranges from 6,000 to 9,500 VND/kg depending on type and quality.

On the import market, scrap metal from Japan, the US, and other international sources is also starting to show signs of cooling down. However, purchasing power from Vietnamese businesses remains quite weak due to the lack of recovery in demand for finished steel products and the fact that many factories have already secured sufficient raw materials for short-term production needs.

The market remains cautious in the short term.

Experts predict that the construction steel market will continue to face pressure from three main factors in the coming period: weak domestic demand, high inventory levels, and a prolonged wait-and-see attitude for lower prices.

In this context, factories are likely to continue combining price adjustments, increased trade support, and production controls to reduce inventory pressure. However, the effectiveness of these measures will depend significantly on the recovery of the civil construction market and the progress of construction projects in the coming period.

Until output improves, the entire steel supply chain is likely to remain on the defensive, focusing on controlling cash flow and price risks rather than expanding large-scale buying and selling activities.