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Vietnamese steel sector amidst US-China trade war

19:49 | 15/08/2018

Improving material supply and proving product origin are ways to limit the impact of trade defence lawsuits amid the growing US China trade war according to insiders

vietnamese steel sector amidst us china trade war

The Ministry of Industry and Trade forecast that the steel sector will maintain annual growth of nearly 20% this year, including construction steel (up 10%), cold rolled coil (5%), straight welded steel pipes (15%), galvanised iron sheet and colour coated paint (12%). Hot rolled coil is expected to see the strongest growth of up to 154%.

Hoa Sen Corporation plans to put into operation a line to manufacture cold rolled coils, galvanised and coloured coat steel with a capacity of 350,000 tonnes this year while Tung Ho company will launch a line able to produce 600,000 tonnes of construction steel.

Hoa Phat Corporation will embark on a rolled steel project with a capacity of roughly 600,000 tonnes in August and build a furnace in the central province of Quang Ngai, which is expected to be inaugurated in 2019 and eventually yield 3 million tonnes of steel sheets and cords each year.

Tran Dinh Long, Chairman of Hoa Phat Corporation, proudly said it is the first time a Vietnamese firm has been able to manufacture hot rolled coils.

Nguyen Thao Vy from VietCapital Securities commented that with the launch of many manufacturing lines, domestic steel firms could prove origin of products to avoid anti-dumping taxes.

Vice Chairman of the Vietnam Steel Association Nguyen Van Sua said Vietnam is suspected of being a transit for Chinese steel to move abroad.

To counter that, the US Department of Commerce imposed a 199.76% anti-dumping tax and a 256.44% special consumption tax on Vietnamese cold rolled coils of Chinese origin, after concluding that such products avoided the US’s anti-dumping tax on the Chinese products.

In recent years, though domestic demand for steel has been met, China has adopted measures to send steel to Vietnam, from cutting prices to export incentives. Sometimes, Chinese steel is 20-30% cheaper than Vietnamese one.

To combat this, Vietnam took trade defence measures by imposing a 10 – 30% anti-dumping tax on Chinese steel.

Sua suggested that domestic firms invest in technological advances, improve governance capacity to increase competitiveness and study international practices.

He called on the State to continue with trade defence measures and ensure rolled coils used in construction under the guise of other kinds of steel are taxed correctly.

Statistics from the General Department of Customs showed that Vietnam exported iron and steel worth US$3.15 billion last year, up 36% in volume and 55% in value from 2016.

Imports of Chinese steel also decreased from 60% of total steel imports in 2016 to 40% in 2017, and are forecast to fall to 38% this year.

Source: VNA