In the first 6 months of 2024, steel imports into Vietnam were at an all-time high, with the risk of losing the domestic market.
Concerns about steel imports from China
The latest report from the General Department of Customs shows that in the first 6 months of 2024, Vietnam imported more than 8.2 million tons of steel (up 48% over the same period last year) with a total value of nearly 6 billion USD (up 25.4% over the same period last year). The import of iron and steel products was more than 3.03 billion USD, up 24.8%.
According to the Vietnam Steel Association, Vietnam currently ranks 12th in the world and first in the ASEAN region in steel production with a production scale that could reach 30 million tons in 2024. However, the steel industry is currently facing many difficulties due to the decline of the real estate market, rising raw material prices, large inventories, etc. And the worrying thing for the Vietnamese steel industry is that it is at risk of losing the domestic market due to steel imported from China, because China is the leading country in importing steel into Vietnam. In 2023, the amount of Chinese iron and steel imported into Vietnam reached 8.2 million tons, equivalent to more than 5.6 billion USD, accounting for 62% of the total volume and 54% of the total import turnover of iron and steel in our country.
In the first 5 months of 2024, China exported 45 million tons of steel, up 25% over the same period in 2023. Chinese steel continues to be imported massively into the Vietnamese market. In the first 4 months of 2024 alone, steel imports were more than 5.4 million tons, up 42% over the previous year. Of which, Vietnam imported 3.7 million tons of steel from China, accounting for 68% of total imports.
China is the world's leading country in steel production and export, with about 500 steel factories of all kinds, with a total capacity of about 1.17 billion tons of steel per year by 2023. Because the steel supply is much larger than domestic demand, Chinese steel producers have begun dumping steel in foreign markets. Vietnam is one of the countries most affected by the wave of steel exports from China.
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Economist Dr. Nguyen Tri Hieu said that the recent sharp increase in Chinese steel imports is due to the slowing growth of China's economy and the cooling real estate market, which has weakened demand for steel consumption. At that time, China will increase steel exports abroad. Currently, China accounts for more than half of the world's steel production, so simply changing its strategy to increase exports abroad will put a lot of pressure on other countries, including Vietnam.
Even in stainless steel products that Vietnam is imposing anti-dumping tax on, Vietnam is one of the 10 largest stainless steel exporting countries of China. Every year, the Vietnamese market consumes about 250,000 tons of stainless steel, of which domestic enterprises sell about 115,000 tons (about 45%), and import 135,000 tons (about 55%). Meanwhile, the capacity of the top 4 manufacturers in Vietnam alone is more than 800,000 tons/year, nearly 3 times higher than the total domestic consumption.
China’s stainless steel is subject to more than 102 trade defense tariffs worldwide, including Vietnam. But China can still maintain its market share in steel exports in general and stainless steel in particular. If Vietnam lifts the anti-dumping tax, it will be difficult to stop the wave of imports from China.
What to do to block the signal?
Up to now, Vietnam has applied 12/28 trade defense cases against steel products, accounting for about 46% of the total trade defense cases ever conducted against all types of products in Vietnam. The above-mentioned anti-dumping cases have always been supported by the Government and the Vietnam Steel Association to protect the domestic manufacturing industry from being harmed by dumping acts of foreign manufacturers and exporters. And China has always been the country accused of dumping in all previous anti-dumping lawsuits against cold-rolled steel, color-coated steel, galvanized steel or stainless steel.
Mr. Pham Cong Thao, Vice President of the Vietnam Steel Association, said that the WTO has tools to limit unfair competition such as dumping on the market or imported steel that affects and damages the domestic steel industry. Vietnam's steel industry is still quite young, so its competitiveness is limited. When imported steel floods the market and is dumped, it damages the Vietnamese steel industry and hinders the development of the steel industry. Enterprises are forced to choose tools and solutions to protect their legitimate and legal interests.
“In recent times, the Government has also had policies to support the steel industry. Especially policies on trade defense. We have also had a number of trade defense measures such as steel billets, construction steel, stainless steel, color-coated corrugated iron... Recently, businesses have also raised the issue of applying trade defense to some new products and continuing to maintain trade defense for some products such as stainless steel,” said Mr. Thao.
Sharing at the Talkshow "Protecting steel manufacturing enterprises in a strangling situation" of Dau Tu Newspaper, Dr. Nguyen Thi Thu Trang, Director of the WTO and Integration Center (VCCI), in most trade defense cases, the enterprises filing lawsuits requesting the application of trade defense measures, especially anti-dumping measures, have been well prepared, with tools and evidence that meet the requirements of the law.
“According to our monitoring, there has not been a case of trade defense cases against steel that has been refused to apply trade measures. The extent of trade defense measures, the tax rate and the duration depend on each type of product. This is based on the fact that the imported products being sued for trade defense measures, the level of unfair competition, the level of dumping, the level of damage to the domestic manufacturing industry, will have corresponding measures,” said Ms. Trang.
According to Associate Professor Dr. Phan Dang Tuat, Chairman of the Vietnam Association of Supporting Industries, Steel is a product belonging to the group of oversized and overweight goods. If domestic production is self-sufficient, it will help stabilize the market and the economy. Domestic enterprises have the advantage of being closer to the market, but if they are dumped, they will lose this advantage. The anti-dumping investigation of steel will make the market economy more transparent and positive.
Meanwhile, economist Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM), also said that steel dumping will cause great difficulties for domestic enterprises, reduce revenue, and affect people's jobs. Therefore, anti-dumping investigations will protect domestic production. Trade defense measures can also help eliminate unfair competition from imported goods, thereby creating a fair competitive environment in the market.
Mr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, affirmed that the steel industry is an extremely important input industry for the economy, society, national defense and security. The development of the steel industry itself is also an economic sector. All countries have the same view of the role of the steel industry. Because of that importance, steel is also the cause of defense and trade protection policies to protect domestic production.
Source: https://baodautu.vn/nhap-khau-thep-tang-ky-luc-viet-nam-phai-lam-gi-d220012.html
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