Vietnam
EnglishEntering the fourth quarter of 2024, Vietnam's steel industry is witnessing positive developments as international markets show improvements due to efforts to resolve challenges in the real estate sector and accelerate public investment disbursement.
Positive Figures in International Markets
According to the General Department of Customs, Vietnam's steel exports remained consistently high throughout the first half of the year, except in February and June, with monthly exports exceeding 1 million tons in other months. Notably, the United States became the largest export market for Vietnamese steel in the first eight months of 2024, with a turnover exceeding $900 million, marking an increase of nearly 92%.
In the same period, Vietnam exported 8,88 million tons of steel products, earning over $6,4 billion an increase of 20,7% in volume and 14% in turnover compared to the previous year. The average export price was $730 per ton, a 5,5% decrease year-on-year. The United States maintained its leading position as the largest consumer of Vietnamese steel, importing 1,26 million tons, which increased 16% in volume, 38% in turnover, and 3,8% in price in comparison to last year. Italy ranked second, importing 1,01 million tons, valued at $635 million.
Vietnamese steel enters Q4 with positive signals in international markets
Moreover, Vietnam's steel exports to North America and Europe are expected to improve further due to competitive pricing. Starting in 2025, free trade agreements [FTAs] such as RCEP and CPTPP are anticipated to bring additional tariff advantages, boosting both bilateral and multilateral trade activities. These factors could help Vietnamese steel penetrate deeper into global markets.
Domestic Market Growth Expectations
Amid a surge of imported steel products [mainly hot-rolled coil [HRC] from China], Vietnam's Trade Remedies Authority received a petition on May 31, 2024, to investigate anti-dumping measures for certain HRC steel products originating from China and India. If sufficient evidence indicates significant harm to domestic manufacturers, the Ministry of Industry and Trade may impose temporary anti-dumping duties to mitigate the adverse effects on domestic HRC manufacturers. This could significantly increase market share for Vietnamese companies by limiting the availability of low-cost steel from China, enabling local manufacturers to enhance production and profit margins.
According to experts from Vasset Management Service [VSM], domestic consumption is expected to recover strongly in the second half of 2024. The real estate sector is projected to rebound, with an increase in newly approved projects and the implementation of the amended Law on Real Estate Business.
Accordingly, the real estate market is experiencing positive changes as these reforms address challenges, helping to resolve legal obstacles in the sector. Specifically, issues related to land valuation, compensation, and site clearance are being tackled, enabling developers to accelerate project implementation.
With the growing number of projects in the North and a clear recovery in the South, real estate which accounts for 60% of steel demand is expected to provide stable support for steel consumption.
Efforts to address bottlenecks in the real estate sector are anticipated to become a catalyst for increased domestic steel consumption in 2025 [Starlake Tay Ho Tay]
New amendments to Land Law, Housing Law, and Law on Real Estate Business that come into effect from August 1, 2024, will provide a solid foundation for boosting supply to meet domestic demand.
Domestic steel prices are forecasted to rise slightly in late 2024 and early 2025 due to higher local demand, easing competitive pressure from Chinese steel. Additionally, declining raw material costs since the beginning of the year are expected to improve the gross profit margins of steel manufacturers in the upcoming quarters.
Overall, from late 2024 to 2027, the growth outlook for the steel industry appears more optimistic, driven by recovering domestic demand from the second half of 2024, increased consumption as new manufacturing plants come into business, and a rebound in China's real estate market. To capitalize on these opportunities, businesses should focus on upgrading production technologies, developing high-quality, environmentally friendly products, and leveraging free trade agreements. These sustainable and strategic initiatives will strengthen Vietnam's steel industry, enhancing its position and competitiveness both domestically and internationally.
Sources:
- The Ministry of Industry and Trade
- https://moit.gov.vn/tin-tuc/thong-bao/bo-cong-thuong-quyet-dinh-dieu-tra-chong-ban-pha-gia-thep-can-nong-nhap-khau-tu-an-do-va-trung-quoc.html
- WTO Center – Industry and Trade Newspaper: https://trungtamwto.vn/chuyen-de/27490-8-thang-xuat-khau-sat-thep-cua-viet-nam-thu-ve-hon-64-ty-usd
- Stockbiz:https://stockbiz.vn/tin-tuc/du-bao-nganh-thep-co-nhieu-diem-sang-nua-cuoi-nam-2024/27233225
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