Steel industry girds for growing demand

12:03 | 11/03/2018 Industry

(VEN) - Despite fierce competition from imported products, Vietnam’s steel industry performed better than expected in 2017 and is expected to further grow in 2018.

steel industry girds for growing demand

Exports up, imports down

Nguyen Van Sua, Deputy President of the Vietnam Steel Association (VSA), said that in 2017, steel production reached more than 22 million tonnes, up 23.5 percent from 2016, while steel sales totaled over 18.92 million tonnes, up 20.7 percent from 2016. Gold plated iron, steel pipe and construction steel took the lead in terms of sales value.

After years of having to import steel billets, in 2017 Vietnam for the first time exported them, selling 300,000 tonnes. The General Department of Vietnam Customs says Vietnam exported almost 5.51 million tonnes of steel products worth more than US$3.64 billion in 2017, up 45.4 percent from 2016. The Association of Southeast Asian Nations (ASEAN) was the biggest importer of Vietnamese steel products, accounting for 59.3 percent of Vietnam’s steel exports, followed by the US with 11.1 percent, the EU (9.0 percent), the Republic of Korea (5.8 percent), India (3.4 percent), Chinese Taipei (2.25 percent), and Australia (1.88 percent).

Steel imports in 2017 were about 14 percent lower than those in 2016.

20 percent growth forecast

Steel demand is forecast to grow this year given the country’s expected 6.5-6.7 growth, accelerated government capital disbursement for public investment projects, and strong growth of the real estate and urban construction markets. The VSA leadership is predicting an increase of 20 percent or more in this year’s steel production and sales. The VSA said Vietnam’s annual steel production capacity is about 30 million tonnes, including 12 million tonnes of steel billets, 12 million tonnes of rolled steel, five million tonnes of galvanized steel sheets, and three million tonnes of steel pipes. Vietnam’s steel production capacity is the biggest in Southeast Asia. However, the Vietnamese steel industry is operating at only 50-60 percent of its capacity. Many steel projects will be put into operation in 2018.

To promote the steel industry’s development, VSA Deputy President, Nguyen Van Sua said the organization plans to participate in the development of national technical standards for steel products, the construction of technical barriers and the application of domestic production protection measures.

The Ministry of Industry and Trade has imposed additional safeguard taxes on steel billets and long steel products for four years. The tariffs will be reduced 1-2 percent annually to zero (0) in March 2020 if no tariff extension is issued.

Thu Ha