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Thursday, July 25, 2024

Soaring steel imports from China threaten Vietnam producers

By Chinh Phong

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HCMC – Struggling Vietnamese steel producers are facing a flood of cheap steel imports from China, said experts at a recent online conference on construction materials.

The domestic steel industry is grapling with persistent challenges, including the long-dormant real estate market, rising material costs, and excess inventory.

The industry aims for a 7% production increase to 30 million tons this year, driven by the ongoing economic recovery. However, the Vietnam Steel Association (VSA) warns that this rebound may be short-lived due to the persistent woes.

The primary challenge is the strong inflow of steel from China, threatening to injure domestic steel makers.

In the first four months of the year, Vietnam saw a significant rise in steel imports, totaling 5.4 million tons, up by 42% over the same period in 2023. Notably, China is the dominant source, accounting for 68% or 3.7 million tons of Vietnam’s steel imports.

The rise in global protectionism is impacting Vietnam’s steel exports. Many countries are imposing technical barriers and trade defenses to protect their domestic production. This trend, coupled with an oversupply of steel products in Vietnam and the influx of cheaper imports, has intensified the price competition. Moreover, global market instability and rising international freight rates are putting Vietnamese steel producers at risk.

The VSA has called on the Government to strengthen technical and quality management standards and implement stricter technical barriers to prevent substandard steel imports. They also recommend timely trade defense measures, such as anti-dumping and countervailing duties, to protect local production.

The VSA has suggested accelerating demand stimulus in the real estate and construction sectors, including the Government’s program to build one million social homes and boost public investment. The association urges the Ministry of Industry and Trade to guide and support steel exporters in addressing trade defense cases abroad.

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