Strong foreign market signals for Vietnamese steel

09:32 | 25/05/2018 Trade

(VEN) - The General Department of Vietnam Customs reports that in the first quarter of 2018, Vietnam’s steel exports soared 38.5 percent and steel imports fell 25.4 percent compared to the same period last year.  

strong foreign market signals for vietnamese steel

Steel exports hit 519,000 tonnes worth US$390 million in March (up 8.9 and 15.8 percent from March 2017, respectively), taking the total to 1.43 million tonnes worth US$1.04 billion in the first quarter of this year (up 38.5 and 57.3 percent from the same period last year, respectively).

Cambodia was the biggest importer of Vietnamese steel with 284,000 tonnes worth US$180 million (up 37.6 and 59.1 percent). It was followed by the US with 217,000 tonnes worth US$179 million (up 131.3 and 144.9 percent), and Indonesia with 186,000 tonnes worth US$147 million (up 25.3 and 37.6 percent).

Steel imports reached 1.05 million tonnes worth US$745,000 (down 4.6 and 17.8 percent from March 2017, respectively), taking the total to 3.12 million tonnes worth US$2.18 billion in the first quarter of this year (down 25.4 and 6.9 percent compared to the same period last year, respectively).

Nguyen Van Sua, Deputy Chairman of the Vietnam Steel Association (VSA), attributed the export increase and import drop to Vietnam’s efficient implementation of trade defense measures, and Vietnamese steel’s improved quality that has won over importers from such discerning markets as the US, Australia, and Europe. Steel production in Vietnam is forecast to grow 20-22 percent this year. Big names in this field, including Hoa Phat Group, Hoa Sen Group, Vietnam Steel Corporation (VNSTEEL), and Ton Dong A Corporation, are expected to carve a niche in many more foreign markets.

However, economists say the Vietnamese steel industry is still facing many difficulties, including trade defense-related lawsuits and a high steel import value. According to VSA, Vietnam faced 30 trade defense-related lawsuits by foreign countries in 2017 alone, some of which are ongoing.

Steel businesses should implement intensive investment. While a number of domestic steel companies have plans to expand production, many Chinese steel producers plan to build steel plants in Vietnam. Vietnamese enterprises should focus on developing products that they haven’t been able to make, such as steel billets and hot-rolled steel sheets, to form complete production lines, and should be careful about the production of conventional products like galvanized steel and construction steel, a VSA representative said.

Tran Tuan Duong, General Director of the Hoa Phat Group, said that first of all, businesses should maintain their domestic markets. Apart from taking market protection measures, enterprises should improve their competitiveness and take any opportunities they have to develop, Duong said.

On March 26, the Australian Anti-Dumping Commission (ADC) issued its final verdict concerning the anti-dumping lawsuit on steel wire rods imported from the Republic of Korea (RoK), Indonesia, and Vietnam. It concluded that the Hoa Phat Group and other Vietnamese firms did not dump their steel coils in Australia. This is good news for Vietnamese steel exporters, as Australia is a potential market.

Thu Ha