Vietnam: Rising Emerging World of Steel

In 2016, domestic demand for steel in Vietnam totaled 22 million tons and demand for steel increased at an average annual rate of about 10%. It is estimated that in 2020, it will reach 30 million tons and become the eighth or ninth in the world. Statistics from the Vietnam Iron and Steel Association showed that in 2016, the construction market in Vietnam increased by about 10% year on year. In 2016, the total steel consumption in Vietnam was about 20 million tons, an increase of about 8% over the same period of last year. Among them, the long material accounted for about 60%, plate and steel accounted for 30% and 10% respectively. Vietnam’s steel imports ranked first in Southeast Asia, with an average annual import volume of 80 billion US dollars, benefiting from the construction market, Vietnam’s steel demand is expected to improve in the further.

However, Vietnam’s dependence on imported steel will continue. Vietnam’s steel market maintains a trade deficit of 5 billion U.S. dollars to 6 billion U.S. dollars every year, with a deficit of about 5.8 billion U.S. dollars in 2015 and a growth of 6 billion U.S. dollars in 2016. The main reason for the large steel trade deficit is that the production of Vietnamese steel products is not balanced. In order to fully meet the domestic demand, oversupply of long class products. The self-sufficiency rate of the products is low. The high value-added steel products are dependent on imports seriously, flat material accounted for 60% – 65% of the total imports. Domestic steel companies are still not able to produce their own hot-rolled coil, 50% ~ 60% imported from mainland China. As of now, imported steel can meet 60% of the market demand.

According to statistics from the General Administration of Customs in Vietnam, Vietnam’s steel exports totaled 2.029 billion U.S. dollars in 2016, an increase of 20% over the same period of last year. The total value of imports was 8.05178 billion U.S. dollars, up 7.2% over the same period of last year. The increase of steel imports was mainly attributed to the increase of the price of imported steel and the increase of the import volume. In particular, the hot rolled coil and some alloyed steel can not be procured locally, only be imported. In addition, billet, coated and color coated plate is also the main imported species. According to the proportion of the countries (regions), they are importing from 51.8% in mainland China, 19.2% in Japan, 12.2% in South Korea and 7.1% in Taiwan.