According to data from China's National Bureau of Statistics, the sluggish real estate market and slow recovery in many other domestic economic sectors have led to an oversupply of steel.
Experts predict that in 2024, China could export a maximum of 90-95 million tons of steel, the highest in seven years. Even in the context of a weak global economic recovery, China still exported 75-80 million tons of steel this year.
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| China has just reported its highest steel export figures in eight years. |
" When domestic demand is low, China will shift steel production to overseas infrastructure projects, primarily in developing markets ," experts predict.
The fact that the world's largest steel producer is increasing its steel exports as domestic consumption weakens is causing concern among many countries about the possibility of a global oversupply.
In the domestic steel market, according to data from the General Department of Customs, in the first two months of 2024, the amount of iron and steel imported into Vietnam was nearly 2.65 million tons, almost double compared to the same period last year. Of this, steel imported from China accounted for over 68% of the total import volume, reaching 1.8 million tons, three times higher in volume and 2.4 times higher in value.
Specifically for hot-rolled coil steel, imports in the first two months of the year reached 1.89 million tons, worth over $1 billion. Of this, steel from China accounted for 1.4 million tons, representing 74.2% of the total HRC (hot-rolled steel) imports in the two months.
The current surge in Chinese steel imports is due to the fact that most steel products imported into Vietnam have a 0% import tax.
The selling price of steel from China and other countries supplying Vietnam has decreased significantly. Chinese HRC prices fell from US$618/ton in Q1 2023 to US$557/ton in Q4 2023. Current HRC prices from China range from US$520 to US$560/ton, depending on the type. This has created considerable difficulties for domestic steel manufacturers.
Typically, in previous years, imports from China accounted for only about 50%, and at times even less than 40%, of Vietnam's total steel imports. With the recent sharp increase in imports, some steel industry experts believe that the slowdown in China's economy and the cooling real estate market have led to weak demand for steel.
According to a report by the Vietnam Steel Association, in 2023, steel imports from China accounted for nearly 8.3 million tons, equivalent to more than 62% of total steel imports. This was followed by Japan at 14.3%, South Korea at 8.3%, and so on. Specifically for hot-rolled steel, 70% of imports came from China.
Businesses report that the selling prices of steel from China and other countries supplying Vietnam have decreased significantly. Hot-rolled steel coils from China fell from $618/ton in Q1 2023 to $557/ton in Q4 2023.
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