Steel sector faces challenges

Inside a steel factory in northern Vietnam. Despite signs of recovery, the industry remains below 2021 production levels (Photo: VNA)

Secretary General and Vice Chairman of the Vietnam Steel Association (VSA) Dinh Quoc Thai cautioned that despite signs of recovery, the industry remained below 2021 production levels and faced intensifying competition and cost pressures.

China’s steel exports are a primary concern, as its producers offload surplus supply amid weak domestic demand, potentially undermining local companies and threatening jobs, according to Thai.

Domestically, excess steel production and rising imports have driven up competition and pressured prices, threatening the profitability of Vietnamese manufacturers.

Global trade policies further complicate the outlook.

Stricter technical standards, trade defence measures, and climate regulations in key markets could restrict Vietnam’s steel exports. Thai highlighted that major economies are erecting trade barriers under the guise of environmental policies, effectively shielding their domestic steel industries. Meanwhile, supply chain disruptions and fluctuating raw material prices are driving up production costs, adding further strain.

Despite these challenges, the steel industry saw moderate growth in 2024. Crude steel production rose 14% year-on-year to 21.98 million tonnes, with domestic consumption and exports also up 14% to 21.41 million tonnes. Notably, flat slab exports surged 55% to 2.78 million tonnes.

Finished steel production grew by 6.1% to 29.44 million tonnes, with coated and pre-painted steel sheets leading at 23.1% growth, followed by construction steel (10.1%), steel pipes (3.5%), and HRC (1.5%), however cold-rolled coil production declined by 19.4%.

Total finished steel sales rose 10.4% to 29.09 million tonnes, though exports dipped 0.6% to 8.04 million tonnes, with hot-rolled coil exports falling by 33.8%.

To counter unfair competition and navigate shifting trade policies, VSA has urged authorities to proactively monitor global regulations and provide early warnings to businesses. Priorities include tracking US tariff policies, monitoring EU carbon border tax developments and securing Vietnam’s eligibility to import scrap metal from the EU.

VSA also called for stronger domestic protections against Chinese steel imports, which are distorting competition. Measures should include simplifying export procedures, enhancing trade promotion efforts and improving legal support for anti-dumping cases./.