In the first nine months of 2024, Vietnam experienced a remarkable increase in steel imports, reaching nearly 12.3 million metric tons, valued at over 48.97 billion. This represents a striking rise of 31.7% in volume and 19% in value compared to the same period in 2023, according to preliminary statistics from the General Department of Customs. This significant uptick reflects not only a growing demand for steel in Vietnam but also a shift in the global steel market, particularly concerning China, which has become the dominant supplier.
The data indicates that September 2024 alone saw nearly 1.55 million metric tons of steel imported, valued at approximately $1.06 billion. The average price per metric ton was around $729.5, marking a decline of 9.7% compared to the previous year. This price drop suggests that despite increasing import volumes, the competitive pricing, particularly from China, is affecting overall revenue. The substantial growth in steel imports highlights the complex dynamics of Vietnam's steel industry as it grapples with both rising domestic demand and competitive pressures from international suppliers.
China has emerged as the largest source of Vietnam's steel imports, supplying about 9 million metric tons in September alone, equivalent to nearly $8.31 billion. This volume reflects an astounding increase of 644.5% compared to the same month last year. Despite this surge, the average price from China was noted at $536 per metric ton, which is significantly lower than prices from other markets. This price advantage stems from China’s surplus production capacity and the need to export inventory, thereby making it a formidable competitor in the Southeast Asian market.
Japan and Indonesia followed as significant suppliers, with Japan exporting 2 million metric tons worth $1.53 billion and Indonesia contributing 3 million metric tons valued at $524.135 million. While Japan's steel imports saw a 708% increase in volume, the Indonesian market experienced a staggering rise of 1,661% in volume. Despite these increases, both countries faced price declines, indicative of the competitive pressures from Chinese steel imports.
The Vietnamese steel industry, while ranked 12th globally and a leader in the ASEAN region, is facing considerable challenges. The decline in the real estate market, rising raw material prices, and substantial inventories are pressing issues. The Vietnam Steel Association has raised concerns that the influx of cheaper steel from China may undermine the local industry’s market share. In 2023, imports from China constituted 62% of Vietnam's total steel imports, emphasizing the reliance on this single source for meeting domestic demand.
The competitive pricing from China, often $30-70 lower per metric ton than other markets, is a significant factor driving this import surge. This pricing strategy is partly due to China’s vast production capabilities, with approximately 500 steel factories operating at a capacity of about 1.17 billion metric tons per year. The oversupply in the Chinese market has led to aggressive export strategies that directly impact countries like Vietnam.
As the global steel market anticipates a slight recovery in prices in 2024, with expectations of a 3.5% increase, local Vietnamese steel producers must navigate these challenges carefully.
