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The downtrend is dominant in the short term as the VNIndex continues to close below the 10- and 20-period moving average. Therefore, traders should reduce long positions and wait for the next signal.

We witnessed the slump in performance of FY8M2022 on year-on-year basis caused by weak sales volume in first 5 months of 2022. Total May steel sales volume posted 121,328 tonnes, decreasing by 30.7% mom, 45.2% yoy.

This monthly report on Vietnam steel production is intended to track the developments in the steel market. During May 22, we observed the weak demand in both domestic and export markets. We also continue to expect the temporary price retreat will end soon after COVID-19 restrictions ease in China.

The May performance witnessed the growth in export volume on year-on-year basis, helping export channel to remain as the key growth driver in 5M22. Domestic volume of steel coat recorded 13,952 tonnes (-27.8% mom, -29.3% yoy) and steel pipes volume posted 10,288 tonnes (-25.2% mom and -36.1% yoy).

Despite the rebound, the downside risk is intact because the VNIndex continues to close below the 10- and 20-period moving average. That means the downtrend is dominant in the short term. Therefore, traders should reduce long positions and wait for the next signal.

Although the 1,200 pts area is still respected, the probability for breaking this area is still high due to the solid selling pressure above. In this case, traders should stay on the sidelines and wait for the bottom forming signal.

Selling pressure is still strong and the rebound phase has low probability to extend. In this case, traders should stay on the sidelines and wait for the bottom forming signal.

The downside risk is intact because the VNIndex continues to close below the 10- and 20-period moving average. That means the downtrend is dominant in the short term. Therefore, traders should reduce long positions and wait for the next signal.

Last week, trading activity increased across the covered warrant market. With foreign trading activity, the market kept ending up to be net sold, selling and buying activity dropped, down 30% WoW. Net sell value was VND0.42bn, down 65% WoW. Notably, covered warrants which have FPT as the underlying asset has attracted most of trading activity for 10 consecutive weeks.

In the short term, the downside risk is intact. Besides, the VNIndex continues to close below the 10- and 20-period moving average. Therefore, traders should reduce long positions and wait for the next signal.