Vietnam’s steel imports are estimated to exceed US$4 billion by the end of the first quarter of 2024

DNHN - In early 2024, steel became one of the commodity groups with high import expenditure. Notably, the decreasing price of imported steel is putting pressure on domestic production.

According to figures recently released by the General Department of Vietnam Customs, the total import value of various types of steel and related products reached US$1.16 billion in February 2024, a 27.8% decrease compared to the previous month, equivalent to a reduction of US$447 million. By the second month of 2024, cumulative imports had increased to US$2.76 billion, a 43.8% increase compared to the same period last year, equivalent to an increase of US$842 million. Data up to March 15th shows that steel and related product imports have reached nearly US$3.6 billion, and are estimated to surpass the US$4 billion mark by the end of Q1.

It is worth noting that steel imports in the first two months of the year alone reached 2.65 million tonnes, worth US$1.88 billion, an 85.4% increase in volume and a 57% increase in value compared to the same period in 2023. Of which, the Chinese market still accounts for a large proportion, with steel imports reaching US$1.72 billion, a 91.2% increase compared to the same period last year and accounting for 62% of Vietnam’s total import value. Notably, hot-rolled coil (HRC) steel products from China accounted for 72% of the total volume, reaching 1.4 million tonnes out of the 1.8 million tonnes imported, with a value of over US$1 billion.

Vietnam’s steel imports are estimated to exceed US$4 billion by the end of the first quarter of 2024
Vietnam’s steel imports are estimated to exceed US$4 billion by the end of the first quarter of 2024.

However, it is concerning that steel export prices from China and other countries have decreased significantly, causing unfair competition and showing signs of dumping, affecting domestic production. For example, the price of hot-rolled coil steel from China has decreased from US$618/tonne in Q1/2023 to US$557/tonne in Q4/2023.

Faced with the pressure of increasing steel imports, domestic enterprises have expressed concerns and may hesitate to expand production investment in Vietnam. This requires appropriate measures from the government to protect the interests of the domestic manufacturing industry from challenges in the international market.

According to a report by the Vietnam Steel Association, in 2023, steel imported from China accounted for nearly 8.3 million tonnes, equivalent to more than 62% of the total steel imported. This was followed by Japan with 14.3%, South Korea with 8.3%, etc. Regarding hot-rolled steel alone, 70% of imports came from China, putting great pressure on domestic production.

The current situation of sharply increasing steel imports from China is because most steel products imported into Vietnam have a 0% import tax.

The selling price of steel from China and other countries supplying Vietnam has decreased markedly. China’s HRC steel has decreased from US$618/tonne in Q1/2023 to US$557/tonne in Q4. The selling price of China’s HRC currently fluctuates between US$520-560/tonne, depending on the type. This has caused unfair competition, showing signs of dumping and stifling domestic production.

Regarding domestic steel production capacity, according to statistics from the Vietnam Steel Association, the total production capacity of domestic steel enterprises currently reaches approximately 23 million tonnes of crude steel (square billets, flat billets). The production capacity of finished steel products, including construction steel, hot-rolled coil, cold-rolled coil, galvanised steel, and steel pipes, reaches approximately 38.6 million tonnes/year. In fact, in 2023, enterprises belonging to the Steel Association produced 27.7 million tonnes. Consumption reached 26.3 million tonnes, of which exports reached 8 million tonnes.

P.V

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