The volume of imported steel, primarily from China, continues to flood into Vietnam, putting significant pressure on domestic steel manufacturers.

According to the General Department of Customs, in the first two months of 2024, Vietnam imported nearly 2.65 million tons of steel, nearly double compared to the same period last year.

Among this, steel imports from China amounted to 1.8 million tons, which is three times higher in quantity and 2.4 times higher in value.

For hot-rolled steel products (HRC), Vietnam imported 1.89 million tons in the first two months of 2024, with an import value exceeding 1 billion USD. Of this, 1.4 million tons, or 74.2% of the total HRC imports, came from China.

This indicates that the increase in steel imports into Vietnam is not slowing down.

In 2023, Vietnam also imported up to 13.8 million tons of various types of steel (including temporary imports for re-export, imports into export processing zones, etc.), an increase of 3.2% compared to 2022 and 11% compared to 2021. In 2023, Vietnam spent up to 10.4 billion USD on steel imports.

Most steel products imported into Vietnam have increased compared to 2022 and 2021. The most imported steel product is hot-rolled steel (HRC) with 10 million tons, up 2.84% compared to 2022 (including hot-rolled steel in coil and sheet form), accounting for 73% of the total steel imports into Vietnam.

Next is construction steel, with nearly 1.3 million tons imported, up 7.8% compared to 2022 and 33% compared to 2021. Various coated steel products amounted to 1.16 million tons, an increase of 20.68%.

According to the Vietnam Steel Association, in 2023, imports of steel from China accounted for nearly 8.3 million tons, equivalent to over 62% of total steel imports. Following China are Japan with 14.3% and South Korea with 8.3%.

Specifically for hot-rolled steel, 70% of imports come from China, putting significant pressure on domestic production.

The sharp increase in imports of Chinese steel is due to the fact that most imported steel products into Vietnam have a zero import tariff.

The selling prices of steel from China and other countries supplying to Vietnam have decreased significantly. Chinese HRC prices fell from 618 USD/ton in Q1 2023 to 557 USD/ton in Q4. Current HRC prices from China range from 520-560 USD/ton, depending on the type. This has led to unfair competition, signs of dumping, and stifling domestic production.

Regarding domestic steel production capacity, according to the Vietnam Steel Association, the total production capacity of domestic steel companies is currently about 23 million tons of crude steel (square billets, flat billets). The production capacity for finished steel, including construction steel, hot-rolled, cold-rolled, coated steel, and pipes, is about 38.6 million tons/year. In reality, in 2023, member companies of the Steel Association produced 27.7 million tons and consumed 26.3 million tons, with exports reaching 8 million tons.

"The domestic production capacity is basically sufficient to meet domestic demand. Moreover, Vietnamese steel meets international standards and is exported to many countries around the world," a representative of a steel company shared.

China's economic slowdown and the "frozen" real estate market have weakened steel consumption demand. Therefore, China has had to increase exports and exert pressure on many markets, not just Vietnam. This is because the country produces several million tons of steel daily, equivalent to Vietnam's monthly production.

In response to the pressure from imported steel, the Vietnam Steel Association has been warning since 2023. Based on the association's recommendations, in October 2023, Deputy Prime Minister Tran Hong Ha instructed the Ministry of Industry and Trade to closely control the import of steel products in accordance with regulations on managing the quality of domestically produced and imported steel.

Notably, the Deputy Prime Minister also requested continued active support for domestic steel producers; the application of necessary protective measures, in accordance with domestic laws and international practices, to combat dumping of imported steel products and limit unfair competition.

Additionally, the Ministry of Science and Technology, in coordination with the Ministry of Industry and Trade and relevant agencies, will research the Vietnam Steel Association's recommendations, based on international experience and Vietnam's actual needs, review the current legal framework, including Circular No. 58/2015/TTLT-BCT-BKHCN dated December 31, 2015, on managing the quality of domestically produced and imported steel, to timely amend and improve as necessary.

According to experts, the increasing import of cheap steel from China poses a risk of imbalanced trade balance, draining foreign exchange, and loss of state budget revenue. Spending billions of dollars on steel imports contributes to pressure on the VND-USD exchange rate, which has increased in recent years. Moreover, domestic producers will face significant pressure, potentially having to scale back production if no protective measures are taken against import pressures.

In response, a representative of the Trade Remedies Department stated: According to regulations, to initiate a trade remedy case, businesses must file a case with the department. Different trade remedy measures have different requirements. For example, in anti-dumping cases, the business must represent over 50% of the industry. The case file must assess whether the imports have harmed domestic production, with data to evaluate damage, and show the impact of the sudden increase in imports on domestic production...

Source: Vietstock