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The shares of trade chief Hoa Phat Group fell Thursday to a 14-month low.
HPG has dropped by over 27 % this 12 months as in opposition to a 14 % fall for the VN-Index.
Hoa Sen Group’s share value fell to its lowest in 15 months in Might and has barely risen since. It has misplaced 42 % this 12 months.
Nam Kim Metal is down 23 % and Pomina Metal Corp, 40 %.
After Russia launched army operations in Ukraine in February, some high Ukrainian metal producers mentioned they must minimize manufacturing to a minimal this 12 months, whereas Russian producers face an embargo from western international locations.
The 2 collectively exported 57 million tons of metal final 12 months, or 3.1 % of world demand, and there was an expectation that Vietnamese producers would fill the hole.
Inventory brokerage VNDirect mentioned in March, “We imagine that high Vietnamese exporters have the chance to extend their manufacturing within the close to future.”
Metal shares soared in February, with NKG rising by 60 % that month even because the VN-Index inched up by lower than 1 %.
HSG rose by 36 %, POM by 21 % and HPG by 17 %.
However after reaching a brand new peak of practically US$1,600 a ton in early April, metal costs have dropped to round $1,160 now.
Analysts blamed this on slower than anticipated financial restoration and the resultant drag on demand.
In its newest forecast, the European Metal Affiliation mentioned consumption might fall by 1.9 % this 12 months as an alternative of rising by 3.2 % because it projected in February.
It is because excessive power costs, disruptions within the provide chain and the Russia-Ukraine disaster might result in a hunch in demand for vehicles and client electronics, and lockdowns in China’s main cities are prone to have adverse impacts on the worldwide financial system, it mentioned.
In a double whammy, manufacturing prices are surging.
Analysts at KIS Vietnam Securities count on the rising prices to pull Hoa Phat Group’s revenue margin down by 4.4 proportion factors this 12 months to 23 %.
Within the first quarter its pre-tax income have been practically 14 % decrease than within the second quarter final 12 months when metal demand was booming.
Hoa Sen noticed income decline for a fourth quarter in a row, whereas Nam Kim’s fell by 40 % from the second quarter of final 12 months.
“Shareholders will see dreadful earnings figures within the second quarter,” Hoa Phat chairman Tran Dinh Lengthy mentioned on the firm’s annual basic assembly on Might 24.
HPG dived by 5 % that day.
However analysts at SSI Analysis count on the metal trade to start recovering when China eases its Covid restrictions.
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