Steel imports increase, what solutions protect the domestic steel industry?

Steel imports remain high

According to the General Department of Customs, the import value of iron and steel of all kinds in May reached 1.72 billion USD, up 14.9%, equivalent to an increase of 223 million USD compared to the previous month. Of which, the import value of iron and steel of all kinds was 1.13 million USD, up 17.9% with an output of 1.55 million tons, up 20.6% compared to the previous month.

The Ministry of Industry and Trade promptly applies trade defense measures (self-defense, anti-dumping, anti-subsidy, trade avoidance) to prevent unfair competition and protect domestic production.

In the first 5 months of 2024, the country imported 7.48 billion USD of iron and steel of all kinds, an increase of 26.3%, equivalent to an increase of 1.56 billion USD compared to the same period in 2023 and approximately the import level of 5 months of 2022. Of which, the import volume of iron and steel of all kinds was 6.92 million tons, an increase of 50.15% with a value of 5.02 billion USD, an increase of 27.6% compared to the same period in 2023.

Vietnam mainly imports iron and steel of all kinds from the following main markets: China reaching 4.77 billion USD, up 53.8% over the same period in 2023 and up 37.9% over the same period in 2022; South Korea reaching 735 million USD, up 4.6% over the same period in 2023.

The large amount of imported steel, especially steel from China, is causing many difficulties for the domestic manufacturing industry.

According to the Vietnam Steel Association (VSA), with the current recovery momentum, it is forecasted that finished steel production in 2024 could reach 30 million tons, an increase of 7% compared to 2023, but this recovery is uncertain, and steel enterprises still face many difficulties.

Speaking at the recent conference on resolving difficulties in the construction materials industry, Mr. Nghiem Xuan Da - Chairman of VSA and General Director of Vietnam Steel Corporation pointed out that as China continues to increase steel exports, Vietnamese steel producers are facing the risk of losing the domestic market. In the first 4 months of the year alone, the amount of steel imported from China was equivalent to 40% of the amount of steel produced domestically.

Sharing about this content, Mr. Nguyen Huu Truong Hung - representative of the Department of Trade Defense (Ministry of Industry and Trade) said that in the near future, the steel industry will continue to face many difficulties in competing with steel imported from China due to small production scale and high production costs compared to large Chinese enterprises. At the same time, many domestic steel products still have to import raw materials from China.

Most domestic enterprises are currently only capable of producing basic steel products for the real estate industry and are not yet capable of producing high-quality products. Accordingly, it will take 5-10 years for Vietnam to be able to produce steel products for the mechanical engineering industry such as: steel for automobile hulls, steel for ship hulls.

In addition, the oversupply of many domestic steel products and the increase in imported steel will make the price competition of domestic finished steel products more fierce. In addition, the unstable world market and increasing international freight rates also pose many risks for steel enterprises.

Urgent need to protect domestic steel industry

Faced with current difficulties, VSA has recommended that the Government direct relevant agencies to continue to develop and improve the system of technical management standards, quality management standards, and technical barriers to prevent steel products that do not meet technical safety and environmental standards from flooding the Vietnamese market.

The Ministry of Industry and Trade promptly applies trade defense measures (self-defense, anti-dumping, anti-subsidy, and trade avoidance) to prevent unfair competition and protect domestic production.

VSA recommends that the Ministry of Industry and Trade continue to guide and support steel exporting enterprises to promptly and effectively respond to trade defense cases against steel production abroad.

Regarding the issue of massive steel imports into the market, the Ministry of Industry and Trade has regularly reviewed and assessed the impact of steel imports, received feedback from the business community and promptly protected businesses in the domestic market through trade defense measures (anti-dumping, anti-tax evasion, anti-subsidy, trade defense) and technical measures.

In a move to protect domestic manufacturing from the influx of imported goods, on June 14, 2024, the Ministry of Industry and Trade issued Decision No. 1535/QD-BCT on investigating and applying anti-dumping measures on some galvanized steel products originating from China and South Korea.

Also on June 14, 2024, the Ministry of Industry and Trade also issued a notice on the receipt of a complete and valid dossier requesting an investigation into the application of anti-dumping measures on hot-rolled steel products (HRC) from India and China.

To help the steel industry overcome difficulties and support loans, the Ministry of Industry and Trade has proposed that the Ministry of Finance review, update and have appropriate import tax regulation policies for a number of steel products with large price fluctuations; and proposed that the State Bank direct and encourage commercial banks to implement preferential credit packages to support investment, production and trading of steel.

At the same time, the Ministry of Industry and Trade is developing and is expected to soon submit to the Prime Minister for promulgation the Strategy for the Development of Vietnam's Steel Industry to 2030, with a vision to 2050. Accordingly, the Ministry is completing the draft to report to the Government to submit to the National Assembly for promulgation of the Law on Key Industrial Development. The long-term goal is to develop the steel industry into a national foundation industry, meeting domestic demand and rapidly increasing exports.

According to the Ministry of Industry and Trade, the development strategy of the steel industry needs to be considered and researched based on the capacity, competitiveness, and market demand characteristics of each domestically produced steel product. Through that, the development goals, solutions, and orientations will be more suitable and feasible for the steel industry in general and each domestic steel product in particular when this development strategy is approved in the coming time.

Source: https://congthuong.vn/nhap-khau-thep-tang-giai-phap-nao-bao-ve-nganh-thep-trong-nuoc-327926.html