The Vietnamese steel industry is facing with numerous difficulties as it is being sued most among Vietnamese exports in foreign countries and confronted with cheap steel flooding from China, said the Vietnam Steel Association (VSA).
Excess crisis and imported steel sheet from China
Excess crisis is posing a huge challenge to the Vietnamese steel sector. In reality, Vietnam imported 308,099 tonnes of coated steel sheet in the first five months of 2016 while domestic consumption was 344,816 tonnes. As a result, imports accounted for 89 per cent of the domestic demand. Vietnam’s galvanised steel production output reached 1,896,482 tonnes while the local consumption was 738,906 tonnes. And, the ratio of production output to consumption of galvanised steel was 256 per cent. This rate was very high.
Worse, the galvanised steel sheet imported from China surged from previous years. Specifically, the country imported 308,099 tonnes of colour coated steel sheet in the first five months of 2016, up 186 per cent from the same period of 2015 while the volume of imported galvanised steel (cold galvanised steel sheet, galvanised steel sheet, and thick-galvanised steel sheet) amounted to 911,796 tonnes in the January - May period of 2016, up 195 per cent year on year. If Vietnam fails to keep Chinese coated steel sheet at bay, its coated steel sheet industry will face collapse.
The strong inflow of Chinese galvanised steel is attributed to its much lower price than domestic ones. According to surveys, the price of Chinese galvanised steel sheet in Vietnam is 30 - 31 per cent lower than that offered by Vietnamese steelmakers. Because this price gap is very broad, Vietnamese galvanised steel sheet fails to compete with cheap products from China.
Apart from the very stiff competition in the domestic market due to unhealthy competing behaviours and dumping sales, Vietnamese steelmakers are facing trade safeguard cases from other countries. At present, the Vietnamese steel industry is being imposed 62 trade remedy measures or so from around the world. Meanwhile, Vietnam filed only two trade defence cases against taxed steel products (cold-rolled stainless steel anti-dumping case and trade safeguard measure against long steel and billet).
Applying trade defence instruments
|
On July 6, 2016, the Ministry of Industry and Trade issued Decision No. 2847/QD-BCT on inspection of safeguard measure imposition against imported colour coated steel sheet.
Inspected items include cold-rolled aluminium/zinc-coated or -galvanised alloy or non-alloy steel (cold colour steel); cold-rolled zinc-galvanised alloy or non-alloy steel (zinc-galvanised steel), cold-rolled coated alloy or non-alloy steel (black steel) in the form of roll, sheet and rolled wave. Inspected commodity codes are 7210.7010, 7210.7090, 7212.4010, 7212.4020, 7212.4090, 7225.9990, 7226.9919, and 7226.9999.
The Ministry of Industry and Trade also warned businesses in the process of signing import contracts on commodities subject to investigations against the possibility of imposing temporary safeguard measures.
|
Trade defence measures are considered a safety valve to ensure fair trade and protect domestic production of similar products from negative impacts caused by imported rivals. In the opening integration process, tariff barriers among countries will be gradually lifted and brought to 0 - 5 per cent. Especially for developing countries such as Vietnam, the use of trade defence measures will extend the postponement of applying tax reductions and provide opportunities for domestic industries to get more mature and more competitive against international goods.
Earlier, at a review workshop on enforcement of trade defence laws hosted by the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade in June 2016 in Ho Chi Minh City, Mr Vu Van Thanh, Deputy General Director of Hoa Sen Group, also said that “Trade remedy lawsuits in other countries put a brake on Vietnamese steel exporters. In the meantime, Vietnam had only two trade remedy cases against taxed steel and imported steel, especially cheap items from China, is still massively flooded into Vietnam. Vietnamese companies should proactively employ trade defence measures as a self-protective shield.”
Therefore, he proposed some solutions such as: Domestic manufacturers and business associations should effectively cooperate with each other to employ trade defence measures, protect the domestic market against imported goods. Given the necessity of using trade safeguard measures, businesses and associations need assistances from competent authorities in disseminating knowledge, speeding up trade defence cases for the purpose of making early decisions on tax imposition. Meanwhile, it is necessary to ensure that the adoption and application of trade defence measures is compliant with international laws.”
Besides, if the Ministry of Industry and Trade supports and takes actions to apply safeguard measures by subjecting trade safeguard duties, it will help stabilise the market, support steelmakers to rationalise production processes, enhance productivity, optimise performance, use alternative fuels, apply tech solutions to cut costs.
Thu Ha
Vietnamese
