Vietnam is witnessing a significant increase in hot-rolled coil steel imports, despite the government's efforts to implement anti-dumping measures. In September alone, the country imported 1.2 million metric tons of HRC steel, marking a dramatic rise of 34% from the previous month and accounting for more than double the volume of domestically produced HRC steel. This surge is causing a serious imbalance in the market and placing immense pressure on local steel producers, such as Hoa Phat, Hoa Sen, and Dong A.
According to the General Department of Vietnam Customs, from January to September, Vietnam imported nearly 8.8 million metric tons of HRC steel, which is an increase of 26% compared to the same period last year. A staggering 72% of these imports came from China, where steel prices are significantly lower,ranging from $30 to $70 per metric ton less than those from other countries. This price difference is largely attributed to China’s overproduction of steel, as the country seeks to reduce its excess inventory through increased exports at lower prices.
The influx of cheaper Chinese steel presents substantial challenges for Vietnamese manufacturers, pushing some to consider cutting back on production. Dr. Hoang Ngoc Thuan from the Foreign Trade University expressed concerns that if this trend continues, Vietnam's domestic steel production could become overly reliant on imports, jeopardizing the stability of the local economy. He stressed that HRC steel is a critical material for various manufacturing sectors in Vietnam, including construction and automotive.
Economist Ngo Tri Long emphasized the importance of the steel production sector to the economy. He warned that without effective protective measures for the domestic market, Vietnam’s steel industry could suffer irreparable damage. While the country has the capacity to produce between 29 and 30 million metric tons of steel annually, exceeding its domestic demand, the ongoing influx of cheap imports is diminishing the market share for local producers.
In response to the rising imports, the Ministry of Industry and Trade initiated an anti-dumping investigation into steel products from China and India on July 26. However, this investigation could take up to a year to complete, leaving the domestic market vulnerable in the interim. At a recent forum in Ho Chi Minh City, Dinh Quoc Thai, vice-chairman of the Vietnam Steel Association, highlighted that the steel industry faced significant challenges, recalling a previous crisis from 2013 to 2017 caused by overwhelming imports from China.
To protect the local steel sector, experts argue that it is crucial to expedite anti-dumping investigations and enhance monitoring of inbound shipments. They stress that support policies must be implemented to bolster domestic HRC steel production, allowing local firms to compete more effectively against foreign rivals. Without strong trade remedies in place, the ongoing influx of low-cost steel imports could undermine Vietnam's steel industry, threatening thousands of jobs and hindering future development.
