Why is HRC steel imported into Vietnam increasing so much?

Inside a factory of a Vietnamese enterprise investing billions of USD to produce high-quality steel for industries such as automobile manufacturing, shipbuilding, mechanical engineering, etc. - Photo: CONG TRUNG

Flooded with imported steel, domestic production "cries"

According to data from the General Department of Customs, in September 2024, Vietnam imported 1.2 million tons of HRC steel, up 34% compared to August and 2.2 times higher than domestic production. This is causing a serious imbalance, putting pressure on domestic steel enterprises such as Hoa Phat, Ton Hoa Sen and Ton Dong A.

In the first 9 months of 2024, Vietnam imported nearly 8.8 million tons of HRC, up 26% over the same period last year.

China accounts for 72% of the total HRC steel imported into Vietnam, with prices 30-70 USD/ton lower than other markets. The main reason is that China is facing a steel surplus crisis, forcing it to boost exports at low prices to reduce inventory.

The flood of cheap steel from China has made it difficult for Vietnamese steel enterprises to compete, pushing them into a situation where they are at risk of shrinking production.

Speaking to Tuoi Tre Online , Dr. Hoang Ngoc Thuan (Foreign Trade University) said that if this situation continues, domestic production will depend entirely on imported goods, causing harm to the economy.

According to economist Ngo Tri Long, steel is a fundamental industry. Without measures to protect the domestic market, Vietnam's steel industry will be severely damaged.

Although Vietnam has a steel production capacity of 29-30 million tons/year, exceeding domestic demand, cheap imported steel still dominates, causing the market share of domestic enterprises to decline.

HRC products are the most important input material for manufacturing and production industries... - Photo: CONG TRUNG

Need to strengthen trade defense measures

Faced with the massive import situation, the Ministry of Industry and Trade launched an anti-dumping investigation into some HRC products from China and India on July 26, 2024. However, the investigation process may last up to a year, while imported steel continues to flood the market, increasing pressure on domestic enterprises.

At the Trade Defense Forum on October 11, 2024 in Ho Chi Minh City, Mr. Dinh Quoc Thai, Vice President of the Vietnam Steel Association (VSA), emphasized that from 2013-2017, the Vietnamese steel industry faced the risk of bankruptcy due to cheap steel imports from China.

Thanks to trade defense measures applied since 2020, domestic steel enterprises have recovered and improved their revenue. However, the current import situation is putting these enterprises at risk of losing the domestic market once again.

To protect Vietnam's steel industry, experts say it is necessary to speed up the anti-dumping investigation process and apply temporary measures such as strengthening import inspection and supervision.

At the same time, investment in domestic HRC steel production also needs to be encouraged with support policies to help businesses compete with cheap imported steel.

According to economic experts, the Vietnamese steel industry is currently at an important crossroads. Without strong trade defense measures, cheap steel from abroad will continue to undermine domestic production, affecting thousands of workers and the future development potential of the steel industry.

Thailand and Indonesia impose tariffs on Chinese HRC steel

Many countries have adopted anti-dumping measures to protect the HRC industry. Thailand, since 2021, has imposed an anti-dumping duty of 30.91% on non-alloy HRC from China and has recently extended this duty to alloy HRC.

In addition, Thailand also uses most-favored-nation (MFN) tariffs and technical barriers to control imports and protect domestic production. Although it only meets 43% of domestic consumption needs, Thailand still fiercely protects its steel industry.

In Vietnam, Formosa and Hoa Phat are participating in the race to produce HRC steel, meeting 70% of domestic market demand.

Source: https://tuoitre.vn/vi-sao-thep-hrc-nhap-khau-vao-viet-nam-lai-tang-vot-20241012111811853.htm