As domestic steel demand falls, steel manufacturers have had to lower selling prices. Since May 11, the prices have decreased 10 times with the sharpest drop of VND3.6 million.

VSA has warned that the situation may be worse in H2 as domestic demand continues to fall, while expected profits from exports are not as high as before.

Hoa Phat Group reported revenue of VND37.714 trillion in Q2, up 6 percent compared with the same period last year, but its post-tax profits fell by 59 percent to VND4.023 trillion.

Hoa Phat reported revenue of VND82.118 trillion, up 24 percent, and post-tax profit of VND12.229 trillion, down 27 percent, for H1.

Prior to that, SMC Trading Investment reported a sharp decrease of 92 percent in its post-tax profit to VND42.5 billion. In H1, it had post-tax profit of VND123 billion, down 83.4 percent.

Similarly, Vnsteel – Thu Duc Steel JSC reported a profit of minus VND2 billion for Q2, while it made a profit of VND34 billion in Q2 2021. As such, it made a modest profit of VND6.1 billion in H1, down 87 percent.

As for Tisco, its Q2 profit plummeted by 90 percent compared with the same period last year to VND6 billion. Its H1 revenue increased by 6 percent to VND6.923 trillion, but post-tax profit dropped by 66 percent to VND34.9 billion.

As profits are unsatisfactory, many steel manufacturers cannot pay debts. Commercial banks have offered to sell bad debts worth hundreds of billions of dong.

BIDV recently announced the selection of a collateral asset appraisal unit for debt worth VND233 billion of Hoang Long Steel Hai Duong branch. According to the bank, the total outstanding loans of Hoang Long reached VND232.5 billion by May 31, 2022, including VND135.3 billion in principal.

Prior to that, the bank in May announced the selection of an asset valuation unit for debt formed in 2012 of Soc Son Steel JSC. The principal of the company was VND321.461 billion.

BIDV also offered to sell debt worth VND440 billion incurred by Viet Nhat Steel Corporation. The collateral for the loan included two real estate projects in Hai Phong.

The bank has offered to sell debt worth VND475 billion incurred by Viet Nga Steel Co Ltd.

Another bank, VietinBank, has also offered to sell many assets that are steel manufacturers’ collateral for loans. VietinBank Ngo Quyen has put three villas in the Prime – Prime Resorts and Hotels ecosystem in KhanhHoa province up for sale. 

Manh Ha