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| Vietnam’s steel output is forecast to reach 30 million tonnes this year, up seven per cent over 2023. (Photo: VNA) |
According to the General Department of Customs, iron and steel imports soared sharply from the beginning of this year, making it one of the seven groups of products with import value exceeding 10 billion USD in January – October.
October saw a record steel import volume at 2.41 million tonnes, worth 1.51 billion USD, representing increases by 55.9% and 41.7%, respectively against the previous month.
Overall, steel import increased by 38.2% in volume and 23.2% in value in the 10-month period.
Notably, steel import from China increased dramatically in the period, by 58.9% in volume to 10.16 million tonnes and 43.2% in value to 6.37 billion USD, making China the largest steel import market of Vietnam in the period.
Japan is the second largest steel import market of Vietnam with 1.7 million tonnes, up 4.6%, followed by the Republic of Korea with 1.05 million tonnes, up 15.3%.
These three markets together accounted for 87.76% of Vietnam’s total steel import.
Meanwhile, the country earned 7.96 billion USD from exporting steel in the period, meaning a trade deficit of 3.1 billion USD.
According to Vietnam Steel Association (VSA), Vietnam’s steel output is estimated to reach 30 million tonnes this year, up 7% over 2023. However, the recovery is uncertain and steel firms are still struggling with difficulty from the harsh competition of China’s cheap steel in the domestic market.
China is increasing the export of steel in the context of weak domestic demand. Data of China’s General Administration of Customs showed that China exported more than 80.7 million tonnes of steel in the first nine months of this year, up 21.2% over the same period last year. Despite an increase in China’s steel export volume, the export value dropped by 5%, indicating that China’s steel prices are competitive.
China’s dumping of cheap steel to many markets over the past two years has increased protectionism around the world. China’s stainless steel alone is subject to more than 102 trade defence tariffs worldwide, including Vietnam. China is the world’s largest steel producer with about 500 plants producing around 1.17 billion tonnes per year in 2023, accounting for more than half of the world’s total steel output.
On July 26, 2024, the Ministry of Industry and Trade decided to initiate an investigation for the application of anti-dumping measures on certain hot-rolled steel products originating from India and China in an effort to protect the domestic steel industry.
According to Nguyen Thi Thu Trang, Director of the WTO and Integration Centre under the Vietnam Chamber of Commerce and Industry, trade defence instruments are legal and effective tools to promote domestic production against unhealthy competition.
VSA’s President Nghiem Xuan Da said that in addition to measures to prevent unfair competition, it is necessary to stimulate demand for industry, including encouraging a recovery in the real estate market and accelerating public investment.
Bao Viet Securities forecast Vietnam’s steel output will increase by around 10% this year and 8% in 2025 on improved demand from the domestic economic recovery, especially the real estate market which accounts for 60% of the steel demand.
The enforcements of the Law on Real Estate Business, Law on Housing and Law on Land are expected to remove bottlenecks and promote the development of the real estate market.
In addition, the effort to accelerate the disbursement of public investment in the remaining months of this year will also help promote steel demand.
The disbursement of public investment reached only 52.29% as of the end of October while the Government is determined to achieve the disbursement rate of more than 95% this year.
The Government is planning more than 790.7 trillion VND (31.18 billion USD) worth of public investment in 2025, higher than this year’s plan at 670 trillion VND.
The global production shift in which Vietnam emerged to be an attractive destination will also help improve the steel demand. Figures of the General Statistics Office showed that realised foreign direct investment (FDI) reached 19.58 billion USD in the first 10 months of this year, up 8.8% over the same period last year.
Vietnam expects to attract 39-40 billion USD worth of FDI this year and the flow into Vietnam is forecast to continue the upward trend next year and remain a major growth driver, according to the Central Institute for Economic Management./.
