Steel Consumption Surges

In June alone, steel imports jumped 205.3 percent in volume and 94.4 percent in value. In the first six months, steel imports increased over 36 percent in volume and 10 percent in value. Notably, the import value of steel-based products soared 49.7 percent in the reviewed period.

 

China remained the biggest steel supplier for Vietnam. In the first five months, Vietnam imported from China 3.05 million tonnes of steel, up 41.9 percent year over year. Japan was the second biggest steel supplier to Vietnam with 967,000 tonnes, down 0.1 percent from a year-earlier period, followed by South Korea with 673,000 tonnes (up 24.8 percent year on year) and Taiwan with 406,000 tonnes (down 15.3 percent).

 

Mr Nguyen Tien Vi, Director of Planning Department under the Ministry of Industry and Trade, said that the strong economic recovery pushed up steel demands in the domestic market.

 

Nevertheless, steel prices tend to go down, particularly locally made products, because of cheaper inputs. Prices of most steel products slipped 5-10 percent since the beginning of 2015.

 

Domestic steel production also expanded on rising demand. In June, crude steel output climbed 8.2 percent year on year to 403,200 tonnes, rolled steel output climbed 22.9 percent year on year to 351,100 tonnes while the steel bar output was forecast at 344,300 tonnes.

 

In combination, in the first six months of 2015, crude steel output expanded 3.2 percent year on year to more than 1.8 million tonnes; rolled steel volume jumped 18.2 percent to over 2 million tonnes, and steel bar production enlarged 8.8 percent to 1.8 million tonnes.

 

Mr Pham Van Chinh, Director of Export Import Department under the Ministry of Industry and Trade, said although Vietnam is holding advantages in steel production, steel imports tends to rise up, thus posing enormous challenges to import management.

 

Currently, many solutions have been introduced to revise import management in line with international commitments and in accordance with Vietnam’s import strategic orientation in the 2011-2020 period.

 

However, he said, to manage imports in general and steel in particular, there are a lot of works needed to be done. For example, the steel import value amounted to US$7 billion but steel production alarmingly dropped in 2015.

 

The surge in steel imports will considerably impact operations of domestic steelmakers. But, this also arouses projections about the boom of property market in the coming time.

 

He warned that the sharp growth of steel import shows that we need reasonable management policies, which are not aimed to control or restrict imports but rationalise macro policies, especially macroeconomic policies. In fact, when the volume of imported construction steel jumps in the midst of construction declines, this may be the signs of a possible boom of the real estate market.

 

Mr Chinh said that while working with relevant bodies to have proper understanding of current import management, the Export Import Department has also proposed the Ministry of Industry and Trade to issue a circular on steel import control.