As per the market reports, Vietnam Steel Association (VSA) has requested the country’s government to file a complaint with the World Trade Organization (WTO) regarding a recent tariff on steel imports imposed by the Trump government, a similar move made by China in April.
The VSA also requested an exemption from section 232 of a 1962 U.S. law that allows safeguards to be raised based on “national security”.
From 2012 to 2017, Vietnam exported about 2.48 MnT of steel to the U.S. and imported about 2.52 MnT from the country.
In 2017, the country’s steel exports to U.S. registered a fall of 43% against previous year and was recorded at 567,000 tonnes. According to the U.S. customs data, Vietnam’s share in U.S. total steel imports stands to be very low at around 1.66%.
Therefore, with such a small percentage of Vietnam in U.S. total steel imports, the import tariffs of 25% might result in Vietnam losing the entire U.S. market.
Vietnam’s total steel imports decline in Jan-Apr’18
According to Vietnam’s customs data, Vietnam imported more than 4.2 MnT of steel and iron products totaling to roughly 3 billion U.S. dollars between January and April, down 24.6% in volume and down 6.4% in value against the corresponding period last year.
In first four months of 2018, all steel plants in Vietnam produced 3.2 MnT of products, up 8.8% y-o-y basis. Meanwhile, nearly 3.1 MnT of steel products were consumed in the Vietnamese market, up by 12.9% against the same period of last year.
As per the VSA, Vietnam spent over 9 billion U.S. dollars importing roughly 15 MnT of steel and iron last year, with China being the biggest import market with nearly 7 MnT of the products totaling 4.1 billion U.S. dollars, followed by Japan and South Korea.
Steel to become a key commodity of exports for Vietnam
Vietnam’s export turnover of steel in 2017 reached 3.15 billion USD, an increase of 55.4% over 2016, which mainly include steel products like steel billets, and construction steel and steel pipes.
As per the VSA, country’s steel industry is expected to grow by 22-22% in 2018. While the construction steel domain is expected to grow by 10%, cold rolled steel is forecasted to grow by 5%, steel welding pipe by 15% and coated steel to grow by 12% in 2018.
Vietnamese steel exports face severe competition from its neighboring country, China. In addition to this, the country’s steel industry has been dealing with anti-dumping tax and subsidy measures from such countries as the US, Canada, Turkey, Malaysia, Thailand, Indonesia.
According to Vietnam’s Import-Export Department, Germany, U.S. and Cambodia are potential markets for Vietnamese steel as they have good growth and high market demand. The German market especially is the gateway for Vietnamese steel to go to Europe.
In 2017, ASEAN was the largest importer of Vietnamese steel, buying 2.8 MnT, up 54.4% over 2016, accounting for 59% of the country’s total steel export. U.S. ranked second with export volume reaching 567,000 tons, valued approximately at 425.4 million USD, accounting for 11.1% in Vietnam’s total steel exports.
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