Is Vietnam becoming Self-Sufficient in Terms of its Steel Requirement?

Over past few years, Vietnam which was completely dependent upon imports to meet its steel demand is slowly reducing its reliance on the same amid Vietnamese steel companies' increase in production capacity and imposition of trade defence measures.

Fall in steel imports

According to a report by the General Department of Vietnam Customs, the import of iron and steel into Vietnam has been decreasing. Vietnam imported 1.1 MnT of iron and steel every month in 2018, 12% lower than in 2017 and 27% lower than in 2016.

As of end-2018, Vietnam had initiated seven investigations on imported steel including billet, long steel, and galvanized sheet. In particular, the anti-dumping duties imposed on billets, long steel in 2016 and galvanized steel sheets in 2016 and 2017 supported domestic prices.

Increase in steel manufacturers' capacity

In terms of increase in capacity, Vietnam's largest steel manufacturers, Formosa Ha Tinh Steel Corp. fired up a second blast furnace on May 18, 2018, and doubled its crude steel production capacity to 7 MnT. Another major steel maker, Hoa Phat Group is setting up four greenfield blast furnaces at its Hoa Phat Dung Quat steel complex in 2019. Each blast furnace will have a volume of 1,080 cubic meters and capacity of 1.2 MnT per year of hot metal. This will raise the capacity of the complex in the Dung Quat Economic Zone in Binh Tri, in central Vietnam's Quang Ngai province, to 4.8 MnT by the end of 2019. They will also raise Hoa Phat's total capacity to 6.8 MnT, thus making it the second-largest steel producer in the country.

Positive forecast for country's steel market

VSA (Vietnam Steel Association) vice chairman Ngyuen Van Sua recently said that Vietnam's steel market forecasts to be in good shape during this year's first quarter despite high prices. While the price of steel rose from 70 USD to 92 USD per tonne throughout January and February, the same have now fallen to 86-87 USD per tonne.

Over 1.95 MnT of steel were sold in the January-February period, up 18.9% year-on-year. Of which, more than 456 tonnes were for export, up 28.8% from January 2018. In preparation for the peak construction season in April-May, firms bought steel in huge volumes for stockpile. The government has also paid attention to public investment and promoting the construction market while economic prospects are bright this year. Sua said the steel sector is expected to grow by a record 10% in 2019.