China proposes to cut steel production
This is the first time that China's National Development and Reform Commission has proposed cutting steel production in its plans. Meanwhile, steel exports from China are expected to reach about 110 million tons in 2024, the highest level in the past nine years.
Although Beijing has taken some measures to reduce steel production to reduce carbon emissions, annual steel output remains above the one billion tonne mark.
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| Steel exports from China are set to reach around 110 million tonnes in 2024, the highest in nine years. Illustrative photo |
According to an official report, the Chinese government will now focus on implementing measures to address structural problems in key industries and stop the competitive race through industrial adjustment. However, the specific amount of steel the Chinese government plans to cut has not been announced. Many believe that China's new move could benefit not only domestic steelmakers but also international markets.
Specifically, first, reduce competitive pressure from cheap steel. If China's steel output decreases, Vietnam will have the opportunity to maintain and develop the domestic steel market without having to face too much competition from cheap Chinese steel.
Second, China’s restructuring policy may lead to increased production of high-quality steel, rather than cheap and low-quality steel. This could open up opportunities for Vietnamese steelmakers, especially those capable of producing high-quality steel, to increase exports and compete in international markets. Markets that require high-quality steel, such as large infrastructure projects, could be a big opportunity for the Vietnamese steel industry.
Third, increase exports to new markets: China's steel production cuts will create a gap in export markets, especially in countries with steel supply shortages. Vietnam can take advantage of this opportunity to expand its steel market share in Asian, European and American markets. This will also help Vietnam improve its trade balance in the steel industry.
In addition to the advantages, the Vietnamese steel industry also faces potential difficulties. Specifically, the reduction in demand for iron ore and the impact on raw materials for production. One of the major risks from this move by China is the decline in demand for iron ore, an important raw material for steel production. According to forecasts, if the steel output of the Chinese market decreases by about 50 million tons, global demand for iron ore may decrease by about 1%. This could affect the Vietnamese iron ore mining industry, especially since Vietnam is one of the major iron ore exporters. The decrease in iron ore prices could also affect the revenue of domestic steel mining and production companies.
| China’s decision to cut crude steel production is a bold move that could bring both opportunities and risks to the Vietnamese steel industry. To maximize opportunities and minimize risks, Vietnamese steelmakers need to continue to improve technology, improve product quality and diversify export markets. |
Source: https://congthuong.vn/trung-quoc-giam-san-luong-thep-co-hoi-nao-cho-viet-nam-378852.html
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