Removing difficulties and protecting domestic steel manufacturing enterprises

DNHN - The steel industry faces many difficulties and challenges in the context of international competition and market fluctuations. Therefore, solutions are needed to remove these difficulties and create favorable conditions for the industry.

Supply exceeds demand

The Vietnam Steel Association (VSA) forecasts that in 2024, Vietnam's finished steel production could reach 30 million tons, up 7% from 2023. On the domestic market, steel consumption is expected to increase by 6.4%, reaching 21.6 million tons, with an estimated inventory of about 8.4 million tons.

Despite these positive expectations, Vietnam's steel industry still faces pressure from large imports. In 2023, Vietnam imported approximately 13.33 million tons of finished steel worth over USD 10.4 billion, up 14.07% from 2022. China remains the largest supplier, accounting for over 62% of total imports and over 54% of total value.

The VSA leader believes that the biggest challenge currently is the significant increase in steel imports from China, putting pressure on the domestic market for Vietnamese steel manufacturers. Meanwhile, global protectionism is on the rise, with countries applying technical and trade defense measures to prevent steel imports, making it difficult for Vietnam to export steel.

Vietnam's steel industry is currently facing significant challenges. The decline in the domestic real estate sector has led to reduced demand for steel in production and export for the construction industries. At the same time, rising raw material prices have increased production costs. Steel inventory remains high, putting substantial pressure on the market.

According to the Ministry of Industry and Trade, steel is one of the commodities frequently investigated for trade defense worldwide. As of May 2024, about 30% of trade defense investigations involve steel products imported from Vietnam

Currently, the range of steel products under investigation is diverse, from coated steel, cold-rolled stainless steel, colored steel, steel pipes, to steel hangers and steel nails. Most lawsuits occur in major markets where Vietnam exports steel, such as the USA, EU, Australia, Malaysia, and Indonesia.

In particular, in the stainless steel segment, Vietnam's production exceeds domestic market demand. Although annual production exceeds 800,000 tons, consumption demand is only about 250,000 tons. Thus, the country imports about 135,000 tons of stainless steel annually to meet production and domestic consumption needs.

The situation of exporting stainless steel is also difficult due to the slow recovery of the global economy, leading to reduced demand from export markets. Moreover, Vietnam's stainless steel faces high trade defense measures in many countries such as Thailand, Malaysia, Turkey, and the USA. Currently, some stainless steel products from Vietnam continue to be investigated in markets like India and the European Union.

Faced with these challenges, Vietnamese stainless steel manufacturers must compete fiercely with competitively priced imported goods in the domestic market, while also striving to expand export markets and minimize potential risks.

Additionally, the situation of supply exceeding domestic demand, along with the increase in steel imports, is leading to fierce price competition in the domestic steel market. Global market instability and rising international shipping costs also pose many risks for Vietnamese steel enterprises in the future.

One of the biggest difficulties that Vietnam's steel manufacturing industry faces is unfair competition from foreign steel producers. In reality, many other countries, especially China, have implemented protective measures to boost steel exports at competitive prices. This has created an imbalance in the market, significantly affecting domestic steel manufacturers.

Enterprises need to create high-quality products

To overcome these difficulties, close cooperation is needed between steel manufacturing enterprises and the government. The government should promote the implementation of reasonable trade defense measures to ensure fair competition. At the same time, it is necessary to strengthen reform and modernize the steel industry to enhance productivity and product quality. Through this, Vietnamese steel manufacturing enterprises will be able to compete strongly in the international market.

Another important aspect that needs attention is enhancing research and development capacity in the steel industry. Investment in research and development will help enterprises create high-quality steel products that meet technical requirements and international standards. Moreover, research and development should focus on using advanced and energy-saving technologies to improve production efficiency and reduce environmental impact.

Additionally, it is essential to promote the training and development of high-quality human resources in the steel industry. This requires cooperation between businesses, universities, and vocational training organizations to train experts and workers with in-depth knowledge and skills in this field. Having a high-quality workforce will help improve productivity and product quality, facilitating the sustainable development of Vietnam's steel industry.

Furthermore, to protect Vietnamese steel manufacturing enterprises, it is necessary to create a favorable and stable business environment. The government should establish support policies and encourage investment in the steel industry, including providing financial packages and infrastructure support. Simultaneously, it is essential to implement measures to reduce administrative procedures, lower costs, and increase transparency in business processes.

Addressing environmental pollution is also a crucial factor in protecting steel manufacturing enterprises. The government should strictly enforce environmental regulations and require businesses to comply to minimize the steel industry's environmental impact. Moreover, encouraging and investing in clean and sustainable technologies to produce steel with lower pollution levels is necessary.

Finally, promoting exports and expanding markets also play an important role in protecting Vietnamese steel manufacturing enterprises. The government needs to create conditions for businesses to access international markets and support building the brand and promoting Vietnamese steel products globally.

To protect and promote the development of Vietnamese steel manufacturing enterprises, it is essential to remove difficulties and create favorable conditions. This requires close cooperation between the government, businesses, and stakeholders. Only with joint efforts and effective solutions can Vietnam's steel manufacturing industry overcome difficulties and ensure sustainable development in the future.

Dai Hai