As the global steel industry sees recovery in 2021, Vietnam is no exception, with modest growth seen in its steel production capacity.
This Asian country’s steel industry is estimated to have added at least 1 million tonnes per annum (mtpa) of pig iron, 1 mtpa of wire rods and 500,000 tpa of rebar capacity in 2021. It also increased its capacity in flats production.
As Vietnam’s steel industry started to recover in 2021, double-digit growth in finished steel production and sales is expected. Despite weak domestic demand, Vietnam’s steel exports have grown significantly.
Finished steel
According to the Vietnam Iron and Steel Association (VSA), Vietnam’s finished steel production is expected to reach 33 million tonnes (mnt) in 2021, a y-o-y increase of 19%, while sales are expected to increase 16% y-o-y to 29 mnt.
Affected by the pandemic, Vietnam’s GDP growth rate will drop to 2.58% in 2021, but the steel industry will still achieve positive growth.
Exports
Despite the slowdown in domestic demand, the substantial growth in exports has made Vietnam a net exporter of steel in 2021. Last calendar, Vietnamese steelmakers had been focusing on expanding exports in response to weak domestic demand, resulting in a significant increase in shipments to overseas markets.
In 2021, Vietnam’s steel exports are expected to surge by 33% to about 13 mnt, according to the General Statistics Office of Vietnam. Although exports to China and Thailand fell by about 26% and 33% y-o-y, respectively, Asian countries are still the main export markets for Vietnam’s steel. In addition, Vietnam’s steel exports (mainly flat products) to the United States in 2021 will increase 4.5 times to 1.05 mnt. At the same time, due to the competitive pricing, Vietnam’s steel exports to the EU will also increase significantly in 2021. Among them, exports to Belgium will increase seven times to 860,000 t, and exports to Italy will rise 4.5 times to 550,000 t.
Higher overseas demand has underpinned the operations of Vietnam’s largest steelmakers, especially the Hoa Phat Group. In 2021, Hefa Group’s steel exports will increase 16% y-o-y to 2.6 mnt. The company said that the exports boost will help the group to diversify its sales amid the pandemic.
Imports
Vietnam’s steel imports in 2021 will drop around 5% y-o-y to 12.3 mnt. As the pandemic affected local demand, and since, at the same time, exports increased, the latter volume exceeded the import volume by nearly 6%.
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