In 2021, Vietnam will produce about 23 million tons of crude steel, ranking No. 1 in Southeast Asia. Vietnam's steel products are exported to more than 30 countries in the region and the world.

It is known that in the near future the Vietnam Steel Association (VSA) will organize a workshop to celebrate its 20th anniversary. The writer had a short conversation with Mr. Nghiem Xuan Da, President of VSA about the maturity of the steel industry over the past 20 years and the prospects for 2022.

Leaping leap of Vietnam's steel industry

As I know, more than 20 years ago, Vietnam’s steel production and export capacity was still quite modest. So, how has Vietnam’s steel industry matured, sir?

Mr. Nghiem Xuan Da: In 2001, the scale of Vietnam’s steel industry was still small, not yet named on the world steel map. Vietnam’s steel industry at that time consisted of factories with small capacity, scattered and unconnected.

At that time, the capacity of the largest steel project was only 500,000 tons/year. Crude steel output is less than 1 million tons of finished steel.

Vietnam's crude steel production grew strongly. (Artwork: Investment Newspaper)

After 20 years, Vietnam has now had a significant position on the world steel map. Crude steel production in 2020 will reach 20 million tons, ranking 14th in the world; Apparently steel consumption reached 23.3 million tons, ranking first in ASEAN in 2020. Export of finished and semi-finished steel products in 2020 reached 11 million tons with more than 6 billion USD.

Factories invested in this period have increasingly large scale, especially large complexes have been built such as Formosa Ha Tinh (7 million tons/year in phase 1) and Hoa Phat Dung Quat. (4 million tons/year in phase 1 and 5 million tons/year in phase 2).

With the results achieved, can you tell us where the Vietnamese steel industry is currently on the world map?

Mr. Nghiem Xuan Da:  In 2021, Vietnam will produce about 23 million tons of crude steel, in the No. 1 position in Southeast Asia.

Steel exports reached about 14 million tons, with a turnover of more than 12.7 billion USD, up 43% in volume and nearly 2.5 times in value compared to 2020. Vietnam’s steel products are exported to more than 30 regional and world countries.

In which, there are about 10 million tons of exported finished steel, accounting for about 50% of the total export of finished steel products of Southeast Asian countries in 2021.

(Source: VSA)

Challenges from trade remedies, environmental taxes

Thus, over the past 20 years, the steel industry has made impressive leaps. However, the rapid increase in Vietnam’s steel export turnover has attracted the attention of many countries and increased investigations into applying trade remedies.

Is this a challenge for steel exporters in the coming time?

Mr. Nghiem Xuan Da:  When goods in general and steel in particular penetrate deeply into markets with Free Trade Agreements (FTAs), facing trade defense lawsuits is understandable.

In addition, overcapacity continues to increase, not only domestically but also globally and especially in Southeast Asia, where it competes directly with Vietnam.

The protectionist trend in international trade continues to increase, the steel industry has and will face more and more trade remedies lawsuits from countries around the world, and from within ASEAN.

From 2004 to October 2021, the number of trade remedy cases against Vietnamese steel exports was 66 cases. Many steel cases were investigated and applied trade remedies with very high tax rates.

In the initial stage, when facing trade remedies lawsuits, steel enterprises faced many difficulties due to limited awareness of trade remedies, weak capacity to participate in lawsuits…

However, this situation has gradually improved in the last 5 years. Enterprises receive the companionship of the authorities, accumulate experience and dedicate appropriate resources to responding to trade remedies.

Steel exporters need to be careful with trade remedies. (Photo courtesy: Reuters)

Steel production is one of the industries with large carbon emissions, while Vietnam is committed to reducing net emissions to zero by 2050. Will this be a barrier to steel exports in the near future, sir?

Mr. Nghiem Xuan Da: That’s right. Currently, countries around the world are facing the challenges of climate change and many countries are committed to reducing CO2 emissions according to the roadmap to 2050. Meanwhile, Vietnamese steel enterprises are not really ready. ready in digital transformation and digital technology deployment to adapt to the industrial revolution 4.0.

In another aspect, the internal difficulties of Vietnam’s steel industry such as modern technology still exist with outdated technologies, small scale, high energy consumption, and not yet meeting environmental standards. ..

In addition, the supply chain linkage is limited; logistics infrastructure is lacking; The product structure is not complete: there is no manufactured steel, high-strength alloy steel, special steel, etc., which also contributes to limiting the competitiveness of Vietnam’s steel industry.

The COVID-19 pandemic is still developing complicatedly on a global scale and is unlikely to end in the near future. Therefore, steel enterprises need to adapt to the new normal, invest in technology to keep up with world trends.

Sincerely thank you!

Source: Vietnambiz