Vietnam’s steel sector is grappling with mounting challenges, including a rising volume of Chinese steel exports, domestic oversupply and global trade barriers, experts warn.

TRAV recommended that the Vietnam Steel Association (VSA) notify relevant local manufacturers and exporters to answer the investigation questionnaire within the prescribed deadline.

Vietnam's steel industry is facing fiercer competition from foreign rivals as imported products, particularly those from China, have flooded the domestic market, raising fears of market saturation. Industry experts have warned that without prompt action, domestic producers could be pushed to the brink.

Vietnam's finished steel production is projected to hit 30 million tonnes this year, marking a 7% annual increase, according to the Ministry of Industry and Trade (MoIT).

The steel industry has affirmed its position by reaching the Top 12 in the world in terms of crude steel production. Not only is the production output growing rapidly, but Vietnamese steel products are also gradually becoming more diverse, according to the Vietnam Steel Association (VSA).

To promote steel exports to the European Union (EU) market, Vietnam's steel manufacturers need to optimise technology, save energy, and carry out product quality standards of the EU, according to Do Nam Binh, head of the Minerals and Metallurgy Division at the Department of Industry under the Ministry of Industry and Trade (MoIT).

Vietnam should sketch out specific policies to provide financial support to motivate steel enterprises to invest in new green technologies, Deputy General Director of the Vietnam Steel Corporation and Vice Chairman of the Vietnam Steel Association (VSA) Pham Cong Thao said in an interview with VietnamPlus e-newspaper.

The determination of the Government, ministries, sectors and localities to promote disbursement of public investment, and efforts taken to address difficulties and speed up the development of the real estate market are positive signs for the steel industry to regain growth momentum in the remaining months of 2023 and early 2024, according to insiders.

While steel prices have continued to fall and demand remains low, the steel industry is expected to recover at the end of this year.

Although the demand for building steel rose by more than 26% in May compared to the previous month, steel prices decreased for the 10th month, and steelmakers expected the struggle to continue.

The steel market is likely to recover in the third and fourth quarters of this year thanks to augmented efforts to disburse public investment and credit packages for social housing projects, along with positive signs of the Vietnamese economy, said Vice Chairman of the Vietnam Steel Association (VSA) Doan Danh Tuan.

The price of construction steel is on the rise despite the fact that the demand for this type of construction material remains weak, insiders have said.

The UK – Vietnam Free Trade Agreement (UKFTA) was providing significant opportunities for Vietnam to expand the export of steel and iron products in the UK.

Many insiders believe that 2022 will be a promising year for the steel industry when the pandemic is brought under control and construction demand rebounds strongly.

With a record export growth rate in the first nine months of 2021, steel is forecast to soon join the 10-billion USD export club.

Steel enterprises are seeking ways to boost exports as the sector’s growth is now mainly driven by export activities.

In Directive No. 10 issued on August 23, the Minister of Industry and Trade requested relevant agencies to enhance management of the export and import of some commodities so as to support domestic production and consumption.

Steel prices have hit a new high after a series of rapid increases from May through June 2021 when they increased by more than 50 percent compared to the beginning of the year.

Iron and steel exports to the European Union (EU) reached 713,000 tonnes in the first five months of this year, up five times year-on-year, reported the General Department of Customs.

Vietnam’s steel sector has witnessed strong development in terms of capacity, output, and products in the recent past.