Defending the domestic steel industry cannot be delayed any longer.

A domestic steel manufacturing enterprise

Vietnam has risen to 12th place in the world in crude steel production with an output of 20 million tons.

Steel enterprises continue to invest in modern technology, improve product quality and expand export markets.

However, experts still believe that the steel industry is still facing difficulties in competing with imported goods as foreign steel has continuously flooded in over the past time, causing the risk of production decline and market loss.

The steel industry needs more than ever support from mechanisms to improve product competitiveness and defend against imports.

Reduce domestic self-sufficiency

According to the Vietnam Steel Association (VSA), Vietnam continues to be a country with a steel trade deficit. Crude steel production has basically met domestic production needs, but there is still a shortage of high-quality steel products and technical steel.

Mr. Nghiem Xuan Da, Chairman of VSA, said that steel production is currently in a state of oversupply, along with the increase in imports, making the price competition of domestic steel products more fierce. In the first 6 months of this year, the cumulative output of imported hot-rolled steel reached nearly 6 million tons, an increase of 32% over the same period last year. Notably, this import volume is equal to 173% of domestic production; of which, the amount of steel imported from China accounts for 74%, the rest is from Korea, India and Japan.

Finished steel is transported to the port warehouse for export to the market.

With such import volume, VSA said that production of two domestic hot-rolled steel manufacturers, Formosa and Hoa Phat, has decreased, reaching only 73% of design capacity compared to 86% in 2021 due to competition with imported goods sold below cost.

In terms of prices, import prices fell sharply from 613 USD at the beginning of last year to 541 USD at the end of last year. The sharp increase in imports and low selling prices have caused the domestic sales market share of the two domestic HRC producers to fall sharply from 45% in 2021 to 30% last year. The expected continued strong increase in imports this year will affect efforts to be self-sufficient in producing high-quality steel.

Mr. Nguyen Huu Truong Hung, representative of the Trade Defense Department under the Ministry of Industry and Trade , said that in the near future, the steel industry will continue to face many difficulties in competing at home with steel imported from China due to small production scale and still high production costs.

Mr. Phan Dang Tuat, Chairman of the Vietnam Association of Supporting Industries, expressed that when high-quality steel could not be produced, it was natural to have to import, but now Vietnam has produced it and the products are competitive. However, this product line is still flooding in with large quantities, especially recently there are signs of selling below cost, so it is necessary to consider opening an anti-dumping investigation, otherwise it could lead to loss of market due to unfair competition.

Self-defense against foreign goods

In fact, Vietnam has had many solutions to protect domestic manufacturing industries from imported goods. Up to now, the Ministry of Industry and Trade has initiated investigations into 29 trade defense cases and applied 22 measures to imported goods; of which 4 trade defense measures are in effect on imported steel products, 1 trade defense measure on steel-related products (welding materials) and 2 cases under investigation related to prestressed steel cables and wind power towers.

In addition, the Ministry of Industry and Trade is conducting a final review of the application of anti-dumping measures on cold-rolled stainless steel and color-coated steel products to assess the effectiveness of the measures as well as the possibility of extending the measures for another 5 years. The review results of these two cases are expected to be available in October. In addition, the Ministry of Industry and Trade recently decided to investigate anti-dumping of hot-rolled steel from India and China.

Transporting steel coils at a factory in Zhouping, Shandong Province, China

According to the representative of the Ministry of Industry and Trade, applying trade defense to basic materials also helps increase the ability to take advantage of commitments in free trade agreements. At the same time, it reduces the risk of Vietnam being investigated by foreign countries for evading trade defense measures because it has proactively protected domestic raw material sources. In addition, applied trade defense measures contribute thousands of billions of VND in tax revenue to the state budget.

To support the steel industry - the foundation industry for many other manufacturing industries, Mr. Phan Dang Tuat proposed that the Government have solutions to support domestic enterprises to develop and improve their competitiveness. Currently, domestic enterprises such as Hoa Phat have invested in making steel for cable-stayed bridges and railways and they are ready to make steel for mechanical engineering and equipment.

“The government has solutions to support domestic enterprises in upstream investment production by using tariff barriers and technical barriers, and that is in the long term. In the short term, anti-dumping solutions are necessary. The investigation is not only to protect domestic production but also to prevent import markets from considering Vietnam as a “transit” market for dumping goods to avoid,” said Mr. Phan Dang Tuat.

Steel industry expert Mr. Nguyen Van Sua also said that to improve competitiveness in the current integration context, in addition to relying on support mechanisms and policies from State agencies, enterprises also need to determine their sustainable growth model. From there, aiming for quality and depth, then technology content, labor productivity, and environmental protection must play an essential role in added value and product value.

Recently, the representative of the Ministry of Finance also agreed with the opinion of VSA on the need to apply appropriate trade defense measures to protect domestic manufacturing enterprises. For import and export taxes, the adjustment is in the direction of increasing gradually, the input is at a low level, while for more refined products, higher taxes will be applied, contributing to creating legal barriers to protect domestic manufacturing enterprises.

The Ministry of Industry and Trade recognizes that developing a strong steel production industry also creates a solid foundation and develops the market for the processing and manufacturing, construction, mechanical engineering industries, etc., contributing to creating a stable supply source and improving productivity and operational efficiency of the industries. Therefore, there needs to be policy orientations to strongly develop the metallurgical and materials industries, especially processed and manufactured steel, along with solutions to protect domestic production in accordance with international practices, preventing dumping.

TB (according to VNA)

Source: https://baohaiduong.vn/phong-ve-nganh-thep-trong-nuoc-khong-the-cham-tre-hon-390630.html