UKVFTA provides opportunity for steel industry to expand exports, switch to decarbonisation
Steel and iron exports to the UK increased rapidly since the UK – Vietnam Free Trade Agreement came into force on May 1, 2021. (Photo: VNA)
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.
The deal also enhances cooperation with the UK in accelerating the decarbonisation process of the iron and steel industry as Vietnam was striving to achieve net zero by 2050.
Nguyen Canh Cuong, Trade Counsellor at Vietnam’s Embassy in the UK, in an interview with Vietnam News, said that high-grate steel production using decarbonisation technology was a potential industry in which the two countries could strengthen cooperation. The decarbonisation technology allowed lower power consumption and carbon emissions than traditional production.
Since the UKVFTA came into effect on May 1, 2021, Vietnam’s export of steel and iron products saw a dramatic rise in the context that the UK increased the investigation and application of trade remedies on steel and iron products originating from several other countries.
Statistics of the Ministry of Industry and Trade showed that steel and iron exports of Vietnam to the UK increased by 1,269% in 2021 over the previous year, one among the fastest growing exports to the UK besides vegetables (82%), pepper (49%), rattan products (56%) and ceramics (32%).
Customs statistics showed that the export of iron and steel products to the UK totalled nearly 419,000 tonnes in 2021, worth more than 491 million USD, compared to the volume of just 51,851 tonnes and the export value of 35.88 million USD recorded in 2020.
Iron and steel products exported to the UK saw rapid growth after the trade deal was put into effect. In the period from January 1 to April 30, 2021 before the trade deal came into force, the iron and steel exports to the UK was just 32,000 tonnes worth more than 38 million USD.
The UK Department for International Trade revealed that iron and steel was one among the top five goods imported to the UK from Vietnam in the four quarters to the end of the first quarter of 2022 with a revenue of 336.8 million GBP (390 million USD) or 7.2% of all UK goods imported from Vietnam.
Other products in the top five included telecoms and sound equipment (1.4 billion GBP or 29.7%), clothing (1.4 billion GBP or 29.7%), footwear (334.8 million GBP or 7.1%) and furniture (329.9 million GBP or 7%).
According to the Vietnam Steel Association, steel and iron products of Vietnam were mainly exported to ASEAN, the US and China while the export to the UK remained modest. The UK imports of iron and steel totalled 7.33 billion USD in 2021, statistics of the United Nations Comtrade database on international trade showed.
Thus, there was still significant room to promote the exportation of steel and iron products to the UK, especially if steel makers could grab the opportunities arising from the UKVFTA, the association said.
The association pointed out that the steel industry of Vietnam had been witnessing a dramatic change in the structure of export markets since 2021, with exports to major markets like ASEAN and China seeing drops while exports to the US, EU and the UK increased rapidly.
Impressive increases in steel and iron exports to the US, the EU and the UK contributed to allowing steel to enter the club of goods with export turnover of 10 billion USD or higher last year. Steel exports hit the milestone of 10.8 billion USD in November 2021 and became the product with the fastest growth rate in export, up 129.8% over the same period last year.
Although steel exports slumped from the beginning of this year on weak global demand, the UK and the EU which had free trade deals with Vietnam, remain spotlight markets.
The latest updates from the General Department of Customs showed that the UK imported nearly 83,500 tonnes of steel and iron, worth 116.4 million USD in the first seven months of this year. Steel exports to the EU were estimated at 1.1 million tonnes, up 18.1% in the period.
According to Vietnam Steel Association, in the context of increasing protectionism, persifying export markets is vital for the domestic steel industry, in which, the free trade deals like the UKVFTA are providing significant opportunities to expand exports.
However, it is necessary for Vietnamese steel makers to improve technology and renovate production and business methods to be able to expand exports in the UK and the EU which had high requirements for product quality, the association said.
Technology renovation
The Ministry of Industry and Trade in a report to the Government about the proposal to develop a strategy for the steel industry to 2030 with a vision to 2050 pointed out that the competitiveness of the steel industry remains low with heavy dependence on imported materials, together with small production capacity, outdated equipment and technology which are causing energy waste and posing risks to the environment.
The ministry proposed policies be raised to build a strong steel industry which is important to promote the country’s development toward industrialisation and modernisation, including policies to encourage renovations in steel production technology.
Green steel, or the manufacturing of steel without the use of fossil fuels, is becoming a trend in the world as the net zero target by 2050 is putting the steel industry under pressure to act.
The steel industry was one of the biggest CO2 emitters. Wordsteel's statistics showed that today, worldwide, on average 1.85 tonnes of CO2 are emitted for every tonne of steel.
Vietnam should consider moving toward green steel to increase exports sustainably and reduce impacts on the environment if the country is to meet the net zero carbon emissions target by 2050, the steel association said.
Cuong from the Vietnam’s Embassy to the UK stressed that Vietnam could enhance cooperation with the UK in promoting the decarbonisation of the steel industry./.
Related News

Vietnam kicked off the year with a strong start in trade, exceeding US$63 billion in the first month
16:30 | 15/02/2025 Import-Export

Vietnam, Korea Customs sign AEO MRA
11:07 | 26/12/2024 Customs

Prioritizing semiconductor workforce training
09:16 | 15/12/2024 Headlines

Revenue faces short-term difficulties but will be more sustainable when implementing FTA
19:27 | 14/12/2024 Customs
Latest News

Embracing green exports: a pathway to enter global supply chains
10:33 | 20/02/2025 Import-Export

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises
10:32 | 20/02/2025 Import-Export

Việt Nam’s durian exports to China plummet by 80%
16:18 | 19/02/2025 Import-Export

Coconut exports reach 14-year high
15:29 | 18/02/2025 Import-Export
More News

Shrimp exports grow in the first month of 2025
15:28 | 18/02/2025 Import-Export

Rice export prices drop, but decline expected to be short-term
08:10 | 17/02/2025 Import-Export

Key agro products expected to maintain export growth this year
08:08 | 17/02/2025 Import-Export

EU issues 12 warnings against Việt Nam’s food and agricultural exports
08:07 | 17/02/2025 Import-Export

Việt Nam to impose VAT on low-value express-imported goods
08:06 | 17/02/2025 Import-Export

Exchange rate risks need attention in near future
16:31 | 15/02/2025 Import-Export

Import and export turnover reaches about US$29 billion in the second half of January 2025
14:52 | 14/02/2025 Import-Export

Market edges up slightly as liquidity remains low
14:48 | 14/02/2025 Import-Export

Business regulations must be trimmed for development of enterprises: Experts
14:46 | 14/02/2025 Import-Export
Your care

Embracing green exports: a pathway to enter global supply chains
10:33 | 20/02/2025 Import-Export

New policy proposed to prevent transfer pricing, tax evasion of FDI enterprises
10:32 | 20/02/2025 Import-Export

Việt Nam’s durian exports to China plummet by 80%
16:18 | 19/02/2025 Import-Export

Coconut exports reach 14-year high
15:29 | 18/02/2025 Import-Export

Shrimp exports grow in the first month of 2025
15:28 | 18/02/2025 Import-Export