Trade defense measures and strong growth of local steel producers are considered main factors helping local products increase sales and regain market shares from importers, mainly Chinese, according to Viet Dragon Securities Company (VDSC)’s latest report.
“This is considered a remarkable achievement for a period as the domestic steel industry has made progress regarding both scale and value chain,” stated the report.
This was due to the fact that trade defense measures were implemented to protect local suppliers.
As of end-2018, Vietnam had initiated seven investigations on imported steel including billet, long steel and galvanized sheet. In particular, the anti-dumping duties imposed on billets, long steel in 2016 and galvanized steel sheets in 2016 and 2017 supported domestic prices.
Hot rolled steel production jumped 29 times in the period of 2015-2018, which is considered the most solid evidence of the value chain development of the local steel industry.
In particular, Vietnam's first production of hot rolled steel, the main input in steel pipe production and galvanized steel sheet is one of the reasons for the decline in steel import demand. VDSC considered this an outstanding achievement of the domestic steel industry when all hot rolled coil had previously been imported.
In the time ahead, although there is unlikely a large increase in supply, the steel industry can find growth drivers. Local steel makers are shifting their production towards the upstream to replace the demand for imported semi-finished products. VDSC expected when Formosa and Hoa Phat operate new blast furnaces at full capacity, steel imports will decline even further.
