Enterprises advocated for a quality and type control procedure for imported steel into Vietnam in order to safeguard domestic steel.
In early July, the Vietnam Steel Association (VSA) recommended to the government and relevant ministries and branches that they devise processes and procedures for inspecting the grade of steel imported into Vietnam. This will enhance the investigation and application of proper trade remedies to limit unjust rivalry for imported steel products and safeguard the domestic steel industry.
This recommendation was made because in the first five months of the year, Vietnam imported approximately 4.6 million tonnes of steel worth approximately $3.93 billion, resulting in a trade deficit of 220,000 tonnes worth $480 million.
Significantly, Chinese steel imports tend to spike dramatically once more. From more than 200,000 tonnes in July–August 2022, it has risen to more than 600,000 tonnes in April of this year. The most direct reason is that a devalued yuan is advantageous for exports, according to Pei Hao, a senior FIS analyst based in Shanghai. Moreover, China's export prices are appealing.
"The yuan depreciated by approximately 5 per cent, China's real estate market remained lethargic, and demand in certain countries such as the Philippines, Indonesia, the Middle East, and Africa increased, resulting in a surge in China's steel exports," said VSA chairman Nghiem Xuan Da.
On the Vietnamese market, even though the demand for steel has not recovered to pre-pandemic levels, the low price of steel from China due to the weak yuan has prompted a number of trading companies to retain their inventory.
Currently, in Vietnam, import regulations are extremely lax. According to the VSA, steel is not required to declare conformance or inspect imported products and commodities because it is not included in the group of products that pose a threat in Circular No. 06/2020/TT-BKHCN.
Currently, most imported steel is exempt from import duties. Other steel products, such as galvanised steel sheet, coloured corrugated iron, steel conduit, and prestressed steel, are no longer subject to trade remedies such as the steel billet safeguard.
In 2022, Vietnam imported more than $11.9 billion worth of finished steel products, totalling 11.7 million tonnes. The deficit in steel trade was $3.9 billion.
Currently, China accounts for approximately 41.6 per cent of Vietnam's steel supply markets, Japan for 15 per cent, Korea for 12.2 per cent, Taiwan for 8.8 per cent, and India for approximately 6.5 per cent.
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The construction materials industry has seen revenue drop by $1 billion over the last two years and is valued at approximately $2 billion annually at present, far below its pre-pandemic figures. This observation came from Dinh Quang Huy, chairman of Vietnam Building Ceramics Association at a seminar held on June 10 in Hanoi seeking measures to help building materials firms out of their current difficulties.
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When competing with China's massive output to meet the rising demand, Vietnam's steel exports are hampered.
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Although large steel firms have been urged to restructure away from construction steel towards industrial products to avoid getting bogged down in a depressed market, most still fail to have the capacity to do so.