Vietnamese steel sector caught in US-China trade war

HÀ NỘI — Improving material supplies and proof of product origin were ways to limit the impact of trade lawsuits amid the growing US–China trade war, according to insiders.

The Ministry of Industry and Trade forecast that the steel sector would maintain annual growth of nearly 20 per cent this year, including construction steel (up 10 per cent), cold rolled coil (5 per cent), straight welded steel pipes (15 per cent), galvanised iron sheet and colour coated paint (12 per cent).

Hot rolled coil is expected to see the strongest growth of up to 154 per cent.

Hoa Sen Corporation plans to put into operation a manufacturing line for cold rolled coils, galvanised and coloured coat steel with a capacity of 350,000 tonnes this year, while Tung Ho will launch a line able to produce 600,000 tonnes of construction steel.

Hòa Phát Corporation will embark on a rolled steel project with a capacity of roughly 600,000 tonnes in August and build a furnace in the central province of Quảng Ngãi, which is expected to be inaugurated in 2019 and eventually yield three million tonnes of steel sheets and coils each year.

Trần Đình Long, chairman of Hòa Phát Corporation, said it was the first time a Vietnamese firm had been able to manufacture hot rolled coils.

Nguyễn Thảo Vy from Viet Capital Securities commented that with the launch of many manufacturing lines, domestic steel firms could prove the origin of their products to avoid anti-dumping taxes.

Vice Chairman of the Việt Nam Steel Association Nguyễn Văn Sưa said Việt Nam was suspected of being a transit for Chinese steel to move abroad.

To counter that, the US Department of Commerce imposed a 199.76 per cent anti-dumping tax and a 256.44 per cent special consumption tax on Vietnamese cold rolled coils allegedly originated from China, after concluding that such products avoided the US’s anti-dumping tax on the Chinese products.

In recent years, though domestic demand for steel has been met, China has adopted measures to send steel to Việt Nam, from cutting prices to export incentives. Sometimes, Chinese steel is 20-30 per cent cheaper than Vietnamese products.

To combat this, Việt Nam has taken trade defence measures by imposing a 10-30 per cent anti-dumping tax on Chinese steel.

Sưa suggested that domestic firms invest in technological advances, improve governance capacity to increase competitiveness and study international practices.

He called on the State to continue with trade defence measures and ensure rolled coils used in construction projects under the guise of other kinds of steel were taxed accordingly.

Statistics from the Việt Nam Customs showed that Việt Nam exported iron and steel worth US$3.15 billion last year, up 36 per cent in volume and 55 per cent in value from 2016.

Imports of Chinese steel also decreased from 60 per cent of total steel imports in 2016 to 40 per cent in 2017, and are forecast to fall to 38 per cent this year. — VNS