Steel imports into Vietnam will be stronger

With the deeper integration of the steel industry into the world market, steel protection by tariffs will decrease, imported steel will enter Vietnam more strongly, and Vietnamese steel exports abroad will have to face more lawsuits from importing countries...

All these challenges require the Vietnamese steel industry to restructure and improve its competitiveness.

Steel industry in 2013

Like a number of domestic manufacturing industries, in 2013 the Vietnamese steel industry was still in a difficult situation. The government has taken many economic management measures to control inflation, stabilize the currency, reduce lending interest rates, and stabilize the dollar exchange rate to support businesses to overcome difficulties. However, due to the prolonged freeze in real estate, reduced public investment, and the slowing GDP growth rate of the country in recent years, steel consumption has decreased, especially construction steel, the main steel production industry in Vietnam.

According to statistics of Vietnam Steel Association, by the end of 2013, the production capacity of steel industry products in Vietnam achieved: Production of metallurgical coke: 1,200,000 tons/year; pig iron from blast furnaces: 3,829,000 tons/year; steel billets for rolling mills: 11,790,000 tons/year; rolled construction steel products: 11,380,000 tons/year; cold rolled wide strip steel: 3,870,000 tons/year; Cold rolled narrow strip steel <1,500mm: 745,000

Statistics show that the domestic steel production capacity has far exceeded the demand. Therefore, most factories have to operate below their design capacity, causing economic efficiency to decrease. According to the assessment, except for some joint ventures and companies with export markets and good product consumption operating at full capacity or exceeding their design capacity, most domestic manufacturing companies are in a state of holding on.

One of the main reasons affecting domestic steel production is that the consumption of construction steel products (steel bars, steel coils and shaped steel) is facing many difficulties because the demand for steel for construction projects has decreased, Chinese Boron-containing steel coils imported into Vietnam are cheap because they enjoy an import tax rate of 0%, so some construction steel manufacturing companies have to cut production. Construction steel consumption in 2013 decreased compared to 2012, reaching only 4.957 million tons (while in 2012 consumption was ~ 5.473 million tons), down 9.43% compared to the previous year.

Steel industry forecast 2014

According to forecasts, Vietnam's economic situation in 2014 has some positive changes thanks to the State's macroeconomic management policies and the efforts of economic sectors, including the steel industry. However, due to the world and regional economic situation still having many difficulties, it has a negative impact on Vietnam's economic situation. The domestic economy has not yet resolved existing difficulties, especially GDP growth at a modest rate of 5.8%, so new investment projects are still limited. The frozen real estate situation, despite stimulus packages, has not had clear impacts, and disbursement is very slow. Industries that consume a lot of steel such as shipbuilding, automobile manufacturing, and mechanical manufacturing have not yet improved, so steel consumption has increased but only at a modest rate of 3-5% compared to 2013 and there is no breakthrough. With such expected growth rate, the country's steel consumption in 2014 is expected to reach only 12.4-12.65 million tons/year.

Because the national steel demand in 2014 did not increase dramatically, steel production capacity is still surplus, competition between domestic companies is still fierce and some companies will stop production due to lack of competitiveness, high product prices compared to companies with high productivity and low prices thanks to advanced technology and equipment.

The market economy will have a strong impact on the Vietnamese steel industry in 2014 with the deeper integration of the steel industry into the world market, the steel protection by tariffs will be reduced, imported steel will enter Vietnam more strongly. The export of Vietnamese steel to foreign countries will have to face many lawsuits from importing countries. All of these great challenges will force the Vietnamese steel industry to restructure and both improve domestic competitiveness and study export advantages in the past few years to expand the market. Because continuously from 2010 to now, the Vietnamese steel industry has exported steel reaching about 2 billion USD. Vietnamese steel has been present in large markets and requires high quality such as the US, EU and in new markets such as Africa, Middle East. The increase in steel exports has demonstrated that Vietnamese steel products in many companies have achieved international quality and have competitive prices.

According to baocongthuong