Amid the ongoing trade war between U.S. and China that has led to increase in trade protectionism measures by various other countries and reduced steel exports by the key steel producing nations, Vietnam’s a leading steel maker Hoa Phat Group shipped 191,600 tonnes of steel products aboard in the first nine months (Jan-Sep) of 2019, rising 32% y-o-y and accounting for nearly 10% of its total sales. The conglomerate produced nearly 2 MnT of construction steel, up 16.1% from a year earlier.
In September, it churned out more than 193,000 tonnes of construction steel, equivalent to the output in the previous month. Apart from finished steel products, the firm also supplies steel billets to the domestic factories. It manufactured 2 MnT of steel billets by the end of September. Hoa Phat has targeted a total output of 2.7 MnT of construction steel this year.
Hoa Phat’s export surge despite rise in trade lawsuits
Although Hoa Phat has witnessed surge in its steel exports, the country’s domestic sector is facing various lawsuits against tax evasion and dumping. The Trade Remedies Authority of Vietnam said that anti-trade investigation measures against country’s exports are on the rise. At of the end of June 2019, local steel products in Vietnam were target of 37 anti-dumping lawsuits among 78 trade remedy lawsuits against Vietnamese exports from the outset of the year. In just one month from Jul-Aug, the sector faced anti-dumping lawsuits in many foreign countries such as Thailand, the EU, Canada, Malaysia, the US, the Eurasian Economic Union, and India.
As per the industry experts, lawsuits against the domestic steel industry in recent years stemmed from the fact that foreign products were transferred to Vietnam for processing and were then labelled as originating from Vietnam. As they evade tax, many steel products imported into Vietnam were cheap compared to domestic products.
In order to effectively handle violations in the origin of goods, Minister of Industry and Trade has directed the Trade Remedies Authority of Vietnam to establish a standing team to increase state management on trade remedies and origin fraud and finalise action plans, co-ordinating with concerned ministries and branches in implementing them.
The ministry has also asked C/O (certificate of origin) issuers and customs authorities to tighten the issuance of C/O, as well as strengthen inspections on enterprises with sudden export volume increases. Apart from this VSA director, Ho Nghia Dung believes that improving competitive capacity to expand export markets and understanding of international trade regulations are significant for Vietnamese steel firms to respond to trade defence lawsuits.
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