In June 2024, Ton Dong A Corporation (“TDA”, Ticker: GDA), has navigated a fluctuating market environment, revealing both challenges and opportunities across the company’s operations. Despite a decrease in total sales volume by 19% from a strong May base, the company recorded a 9% increase year-on-year (y/y), with total sales reaching 68,000 tons. For the first half of 2024 (1H 2024), TDA recorded a cumulative sales volume of 438,000 tons, marking a significant 16% increase compared to the same period in 2023. The steel industry continues to face a complex landscape of market demand and global macroeconomic influences.
Domestic segment:
• Total domestic sales volume for June 2024 decreased by 34% month-over-month (m/m) and 10% y/y to 24,600 tons. This decrease is owing to comparisons to high baseline figures and highlights continued volatility in domestic consumption which has not fully recovered, particularly within construction and industrial sectors.
• Product segment galvanized steel (GI) saw a decrease month-over-month but a 23% increase y/y, signaling potential growth opportunities in construction-driven demand.
• Cumulative 1H2024 domestic sales totaled 161,400 tons, a modest 2% increase y/y, suggesting persistent challenges yet steady market retention.
• Market share in the domestic galvanized sector remained steady at 15%, demonstrating the company’s competitive edge.
Export segment:
• Total export sales volume for June 2024 was 43,444 tons, a slight 8% decrease m/m but a 23% increase y/y.
• GI segment showed robust growth with a 61% increase y/y, whose standout performance was pivotal.
• Cumulative export volume for 1H2024 reached 276,600 tons, up 27% from the previous year, highlighting export demand has been a key growth driver and underscoring the company’s global strategic reach.
• Export market share reached 17% within the galvanized steel sector, reflecting successful market diversification and global expansion efforts.
The ongoing global macroeconomic shifts and trade dynamics continue to influence the galvanized steel industry. The company’s strategic adaptability and proactive market engagements have positioned TDA effectively against these fluctuations. Looking forward, TDA is positioned to leverage potential market recoveries across regions, particularly in regions stimulated by economic policies favoring industrial growth. Despite the heterogeneous recovery across sectors and geographies due to macroeconomic conditions such as investment climate and restrictive access to credit, the company’s commitment to operational excellence and market-driven strategies remains unwavering. However, the slowdown in growth and changing trade policies in developed countries present both challenges and opportunities for the global steel consumption and the galvanized steel industry in Vietnam.
The steel industry in Europe continues to struggle with the repercussions of the Ukraine conflict and a weakening economic outlook. Though there's been a slight recovery in steel demand towards the end of 2023 into 2024, particularly in construction, the sector remains affected by high energy costs and rising interest rates. Conversely, in America, the market awaits potential cuts in interest rates and changes in trade policy due to political elections.
In China, there is a shift in steel consumption trends from reliance on the commercial/residential real estate sector to growth in high-tech industries, new infrastructure, and advanced manufacturing, though domestic steel demand remains tepid due to the real estate market.
Vietnam is expected to remain a dynamic market in the medium term, led by manufacturing, public investment, and FDI. While each market has its unique challenges, TDA’s commitment to operational excellence and market-driven strategies remains unwavering. The company’s ongoing efforts to enhance sales efficiency and production to meet increasing customer demands has better positioned the company in challenging market cycles.
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Disclaimer: This report contains forward-looking statements based on the company's expectations and projections. Actual results may vary due to inherent risks and uncertainties. Readers should not consider these forward-looking statements as guarantees of future performance.