*Imports nos are from Jan-Apr for both the years
Source: VSA
The VSA (Vietnam Steel Association) has reported that the country’s steel businesses are enjoying significant growth in steel production and has showed reduced reliance on Chinese imports in the first five months of 2018 starting from Jan to May’18.
According to VSA numbers, the local production of steel in Vietnam stood at 9.67 MnT by the end of May’18, an increase of 24% against the corresponding period of previous year.
Application of advanced technology is helping Vietnam’s steel sector produce more sophisticated products and reduce reliance on imports.
In a press media interaction, VSA’s chairman Ngyuen Van Sua said that that the development in technology has allowed Vietnamese businesses to produce more sophisticated products like hot rolled steel, something they couldn’t do before.
In May’18, Vietnam’s one of the key steel player Formosa Ha Tinh Corporation (FHS) which held an annual capacity of 3.5 MnT has started its second blast furnace doubling its crude steel capacity to 7 MnT per annum. With this Vietnam will be able to produce more steel and its dependency on imports from China will also be reduced.
As per the market reports, Vietnam’s another steel major, Hoa Phat has also sped up the construction of two phases of its Dung Quang steel complex. In the first phase a manufacturing line with the annual capacity of 0.6 MnT was slated to come into operation in May’18 and the remaining two lines are expected to start operation two months later. In the second phase a HRC manufacturing line with annual output of 2 MnT per annum is expected to be completed by 2020.
In terms of sales, the country sold about 6.69 MnT of steel in the first five months of 2018, registering an increase of 35% y-o-y basis.
Vietnam’s plummeting steel imports and increasing export volumes
The association also stated that in the first four months of the year, Vietnam imported 1.8 million tons of steel from China, a year-on-year reduction of 34% in volume and 13.4% in value.
In this total steel imported by Vietnam during Jan-Apr’18, although the Chinese steel accounts for 42.5% of steel imported by Vietnam, this figure is down from 60% in previous years and shows that the country is reducing its dependence on China.
The VSA chairman has added that in the coming months Vietnam’s steel imports from China are likely to fall further.
The main importers of Vietnamese steel are ASEAN (Association of Southeast Asian Nations) countries accounting for 59.2% of total exports worth USD 1.71 billion, while the U.S. ranks second at 11%, as stated in a VSA report.
The country’s steel exports during Jan-May’18 surged by 61% y-o-y basis and are recorded at 1.91 MnT worth USD 1.4 billion.
Vietnam exported 4.71 MnT of steel in 2017, worth USD 3.15 billion, a growth of 36% in volume and 55% percent in value as compared with 2016.
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