Vietnam's domestic Steel Industry Forecasts 7-8% Growth
[tintuc]
The Vietnam Steel Association (VSA) predicts that the domestic steel industry will continue to grow by 7-8% this year.
According to VSA's report, the total production capacity of domestic steel companies currently reaches about 23 million tons of crude steel (square billets, flat billets). The capacity for finished steel products, including construction steel, hot-rolled coil (HRC), cold-rolled steel, coated steel sheets, and steel pipes, is approximately 38.6 million tons per year. With the current recovery momentum, it is forecasted that the production of finished steel this year could reach 30 million tons, an increase of 7% compared to 2023. However, this recovery is uncertain, and steel companies still face many difficulties.
Mr. Nghiem Xuan Da, Chairman of VSA, said that steel production is currently in a state of supply exceeding demand, coupled with increasing imports, making domestic steel price competition fiercer. For example, according to the latest data from customs authorities, in April 2024, the volume of imported hot-rolled steel (HRC) into Vietnam continued to increase, reaching 890,000 tons, 1.5 times the domestic production volume. Of this, HRC imports from China accounted for 71%.
Accumulated over the first four months of 2024, the total volume of imported HRC into Vietnam was 3.93 million tons, an increase of 32% compared to the same period in 2023, and 159% of the total domestic HRC production. Of this, imports from China accounted for 73% with 2.9 million tons, more than double the same period in 2023. This is the first time that Vietnam has imported more HRC in a year than it produced domestically.
With such a volume of imports, the VSA stated that the production of the two domestic HRC producers, Formosa and Hoa Phat, has decreased, reaching only 73% of design capacity compared to 86% in 2021 due to unfair competition with imported goods sold below cost. Regarding prices, import prices have significantly dropped from 613 USD at the beginning of 2023 to 541 USD at the end of 2023.
The increase in imports and lower prices have significantly reduced the domestic market share of the two domestic HRC producers from 45% in 2021 to 30% in 2023. It is expected that the strong increase in imports this year will continue to impact efforts to self-produce high-quality steel.
Although Vietnam's steel production currently ranks 13th in the world and first in the ASEAN region, the steel industry still has long-term bottlenecks. Vietnam continues to import steel sheets, accounting for over 50% of total import turnover, mainly hot-rolled steel. Additionally, Vietnam still imports shaped steel and some metal-coated and color-coated sheet products, accounting for about 20-25% of domestic consumption.
In response to this reality, the VSA has proposed that relevant agencies continue to develop and complete a system of technical standards and quality management standards and technical barriers. This aims to prevent steel products that do not meet safety and environmental technical standards from entering the Vietnamese market.
The Ministry of Industry and Trade should promptly apply trade defense measures to prevent unfair competition and protect domestic production.
The Vietnam Steel Association (VSA) predicts that the domestic steel industry will continue to grow by 7-8% this year.
According to VSA's report, the total production capacity of domestic steel companies currently reaches about 23 million tons of crude steel (square billets, flat billets). The capacity for finished steel products, including construction steel, hot-rolled coil (HRC), cold-rolled steel, coated steel sheets, and steel pipes, is approximately 38.6 million tons per year. With the current recovery momentum, it is forecasted that the production of finished steel this year could reach 30 million tons, an increase of 7% compared to 2023. However, this recovery is uncertain, and steel companies still face many difficulties.
Mr. Nghiem Xuan Da, Chairman of VSA, said that steel production is currently in a state of supply exceeding demand, coupled with increasing imports, making domestic steel price competition fiercer. For example, according to the latest data from customs authorities, in April 2024, the volume of imported hot-rolled steel (HRC) into Vietnam continued to increase, reaching 890,000 tons, 1.5 times the domestic production volume. Of this, HRC imports from China accounted for 71%.
Accumulated over the first four months of 2024, the total volume of imported HRC into Vietnam was 3.93 million tons, an increase of 32% compared to the same period in 2023, and 159% of the total domestic HRC production. Of this, imports from China accounted for 73% with 2.9 million tons, more than double the same period in 2023. This is the first time that Vietnam has imported more HRC in a year than it produced domestically.
With such a volume of imports, the VSA stated that the production of the two domestic HRC producers, Formosa and Hoa Phat, has decreased, reaching only 73% of design capacity compared to 86% in 2021 due to unfair competition with imported goods sold below cost. Regarding prices, import prices have significantly dropped from 613 USD at the beginning of 2023 to 541 USD at the end of 2023.
The increase in imports and lower prices have significantly reduced the domestic market share of the two domestic HRC producers from 45% in 2021 to 30% in 2023. It is expected that the strong increase in imports this year will continue to impact efforts to self-produce high-quality steel.
Although Vietnam's steel production currently ranks 13th in the world and first in the ASEAN region, the steel industry still has long-term bottlenecks. Vietnam continues to import steel sheets, accounting for over 50% of total import turnover, mainly hot-rolled steel. Additionally, Vietnam still imports shaped steel and some metal-coated and color-coated sheet products, accounting for about 20-25% of domestic consumption.
In response to this reality, the VSA has proposed that relevant agencies continue to develop and complete a system of technical standards and quality management standards and technical barriers. This aims to prevent steel products that do not meet safety and environmental technical standards from entering the Vietnamese market.
The Ministry of Industry and Trade should promptly apply trade defense measures to prevent unfair competition and protect domestic production.
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