Steel News

The steel industry in Vietnam, along with the global steel industry, is aiming to achieve carbon neutrality by 2050. Consequently, in recent times, the Vietnamese steel industry has undergone significant innovations and remarkable developments, contributing to the country's modernization and industrialization process.From 2015 until now, the steel industry in Vietnam has made significant strides and grown substantially, positioning itself as the 13th largest producer of crude steel in the world and leading ASEAN in both steel production and consumption of finished steel products. Presently, there are over 300 enterprises across the country engaged in the production and trade of iron and steel, contributing significantly to the growth and development of the steel industry.The Deputy Chairman and Secretary-General of the Vietnam Steel Association, Mr. Dinh Quoc Thai, highlighted that the Vietnamese steel industry has been making efforts to digitize, optimize technology and efficiently utilize energy resources. Some steel enterprises have leveraged surplus heat to generate electricity, meeting most of the plant's power needs, thereby reducing adverse environmental impacts and showing promising initial results. However, the steel industry still bears responsibility for 7-9% of the total national emissions and 45% of the industrial processes identified in the national strategy on climate change. Hence, the Vietnamese steel industry needs to move towards a green growth strategy to achieve the goal of achieving carbon emissions of "0" by 2050.Currently, green development has become a global imperative to limit and eliminate the adverse impacts of climate change on socio-economic growth. The steel industry in Vietnam possesses a full range of existing technologies available worldwide, including blast furnace technology, oxygen furnace technology and electric furnace technology. Additionally, there are some other technologies like direct reduction technology; however, the adoption of this technology is currently at a modest level.Additionally, Vietnam's steel industry is actively implementing more advanced technologies and production processes to aim for greener production. This encompasses utilizing more advanced technologies to reduce emissions, recycling raw materials and optimizing production processes to minimize environmental impact. Steel manufacturers can adopt recycling technologies to reuse materials like scrap steel, reducing waste output and applying environmental protection measures throughout the production process. This not only helps reduce negative environmental impacts but also promotes sustainability and efficiency in production. Furthermore, governmental support and investments in research and technology development play a pivotal role in driving the steel industry towards greener production.This is indeed the biggest challenge facing the Vietnamese steel industry in the upcoming period, but simultaneously, it represents a significant opportunity for the steel sector to innovate, modernize, and evolve into a technologically advanced and sustainable industry.

The steel industry in Vietnam and globally is showing positive signs, forecasting a resurgence in a new cycle for the steel sector. With the increasing demand for steel, the market anticipates a significant acceleration in business outcomes next year.The general situation of the global steel industryWith the global economy continuing to decline under the strain of tightened monetary conditions impacting the world economy at large and the steel industry in particular, steel production slowdowns are evident in several key markets such as Japan, South Korea, Russia and others. While there's a prevailing trend of decline in the market, there are still discernible signs of recovery. In the first nine months of 2023, global crude steel production reached 1.4 billion tons, marking a 0.1% increase compared to the same period in 2022. This uptick serves as a bright spot, indicating a gradual resurgence in the steel industry.With its consistent dominance, accounting for over 50% of the annual global steel production, China's steel industry significantly influences the worldwide steel sector. Even steel prices within China's domestic market have a profound impact on the global steel market. Historical data also indicates that steel prices in Vietnam tend to exhibit quite similar fluctuations, sometimes responding at a slower pace compared to the fluctuations seen in Chinese steel prices.With Chinese steel prices nearly hitting their lowest levels in 2017 and showing signs of recovery in the third quarter of 2023, thanks to favorable export markets, there's an anticipation for a positive impact on the overall global steel price landscape. This also suggests a potential resurgence in demand in the largest steel markets among developed nations, including the Vietnamese steel industry.The Vietnamese steel industry is on the verge of recoveryIn Vietnam's market specifically, the steel industry anticipates a robust resurgence as the real estate market revives from 2024 onwards. Simultaneously, the government is vigorously expediting public investment disbursement on the largest scale ever seen. Most key national projects have commenced this year, indicating that the period from 2024 to 2026 will witness a dense construction phase, generating substantial demand for steel.The demand for steel has somewhat improved in the latter months of the year. In fact, several steel industry enterprises are experiencing positive business outcomes and substantial consumption. According to the financial report for Q3/2023 from Hoa Phat Group Joint Stock Company, their net profit reached approximately 2,000 billion VND, a significant improvement from the loss of 1,800 billion VND in the same period last year. The recovery in net profit is attributed to enhanced sales volume, reduced input material costs, and improved inventory management.According to assessments by multiple financial organizations, in the upcoming recovery phase of the steel industry cycle, Hoa Phat Group Joint Stock Company is expected to be the largest and first beneficiary due to its advantages in scale, dominant market share in various product segments, as well as its strong financial capacity.

The Ministry of Industry and Trade has just announced receiving information from India's Directorate General of Trade Remedies about issuing a questionnaire for the sunset review of countervailing duties on stainless steel welded pipes from China and Vietnam.The Trade Remedies Authority specifies that a sunset review is conducted just before the expiration of a 5-year period from the date of the official decision on anti-dumping duties or from the date of the review results (if the review covers both anti-dumping and damage).The tax imposition was issued by the Indian Ministry of Finance and became effective for a period of 5 years starting on September 17, 2019. The goods under review are stainless steel welded pipes falling under the HS codes: 7306 40 00, 7306 61 00, 7306 69 00, 7304 11 10, 7304 11 90, 7304 41 00, 7304 51 10, 7304 90 00, 7305 11 29, 7305 90 99, 7306 11 00, 7306 21 00, 7306 29 19, 7306 30 90, 7306 50 00, 7306 90 11, 7306 90 19, 7306 90 90. The HS codes do not limit the scope of the products under review.According to India's regulations, after 5 years of application, upon the request of the domestic manufacturing sector's representative, the Directorate General of Trade Remedies must conduct a final review to assess the necessity of continuing the anti-subsidy measures or to consider the possibility of a recurrence of subsidization practices or damage to the domestic manufacturing sector if the anti-subsidy duty on stainless steel welded pipes from Vietnam is terminated.The initiation of the sunset review investigation on the anti-subsidy tax on stainless steel welded pipes from Vietnam took place on September 30, 2023, according to the Directorate General of Trade Remedies. The official submission of the questionnaire for investigation to manufacturers, exporters and related parties occurred on November 28, 2023, by the Indian Directorate. Consequently, concerned parties have 7 days from the official date of sending the questionnaire to submit opinions on the security measures of the petition within the required file. Within 15 days from the official date of sending the questionnaire, entities need to provide input on the petition, the scope of the investigated goods, and propose product management code numbers. Furthermore, the respondents are expected to submit their responses to the investigation questionnaire and relevant information within 30 days from the official date the Directorate General of Trade Remedies sent out the questionnaire.The period for conducting the review on the anti-subsidy duty on stainless steel welded pipes from Vietnam spans from April 1, 2022, to March 31, 2023. Regarding the content related to damages, the investigation period will additionally cover the three most recent financial years: 2019-2020, 2020-2021, and 2021-2022.The Bureau of Trade Remedies recommends that relevant exporters thoroughly study all related documents and information regarding the case. Full and comprehensive cooperation with the Indian Directorate General of Trade Remedies is advised. Register as an involved party, respond to the questionnaire within the specified timeframe and format and maintain regular contact with the Bureau of Trade Remedies to receive timely information and support.

After a slight decrease in October 2023, Hoa Phat's consumption of construction steel and high quality steel increased again in November 2023 due to the revival of demand for construction steel and partly from measures to boost the industry1. Hoa Phat's operating situation in NovemberAccording to the business production report for November 2023 from Hoa Phat Corporation, crude steel production output reached 635,000 tons, equivalent to the previous month.Sales output of HRC products, construction steel, high quality steel and billets reached 709,000 tons, up 12% compared to October 2023. For HRC products, consumption in November 2023 recorded 270,000 tons, high quality steel reached 410,000 tons, increasing by 21% compared to October 2023.In addition, in November 2023, Hoa Phat also provided 37,000 tons of galvanized steel sheets and 73,000 tons of steel pipes of all kinds to domestic and foreign markets.Accumulated in the first 11 months of 2023, Hoa Phat produced more than 6 million tons of crude steel, sales volume reached 6.96 million tons. Of which, construction steel and high quality steel reached 3.3. million tons, down 15% compared to November 2022. Export activities of these types of steel contributed 695,000 tons.2. Expectations for global steel recovery in 2024Hoa Phat's steel consumption output in November 2023 recorded growth in the context of the Vietnamese and world steel industry is showing positive signs.According to forecasts of the World Steel Association, global steel demand in 2024 is expected to recover by 1.9% compared to 2023, reaching 1.8 billion tons. In particular, the EU and Indian markets recovered by 5.6% and 7.5%, respectively, compared to the same period. Global steel supply is expected to decrease slightly by 1% due to the impact of China implementing a plan to cut production by 2% in 2024. This also affects global steel prices as it is expected to increase slightly by 3.5% compared to 2023 due to tight supply.China accounts for more than 50% of the world's annual steel production. In the first 9 months of 2023, the country's steel supply increased by 0.9% over the same period thanks to the recovery of blast furnaces in Tangshan. In addition, the Chinese government is also extending production cut measures to support the domestic steel industry's recovery.Furthermore, the Indian steel industry, accounting for 7% of the world steel market share, also recorded a supply growth of over 10% in the context of the country's government increasing investment in infrastructure construction to serve economic development.3. Prediction of Vietnam steel situation in 2024In Vietnam, steel demand is expected to increase strongly again when the real estate market gradually recovers from 2024. In the latest report of MB Securities (MBS), it is forecasted that in 2024, domestic construction steel prices will recover to 15 million VND/ton (up 8% compared to 2023). Coal and ore raw material prices are expected to decrease slightly by 7% and 6% in 2024 due to stable supply and decline in China's demand for crude steel production.For the export market, recovering demand in the EU and US has a positive impact on output and price of exported galvanized steel sheets. Steel export prices are expected to increase by 9% in 2024, helping the gross profit margin of steel export enterprises improve.Above is the latest news about the Vietnamese steel market in general and Hoa Phat Group in particular. For all updated information about the steel industry in Vietnam and the world, readers can find out more details at the MRS Steel website.

2023 has proven to be a challenging year for the steel industry as many steel companies continue to struggle with losses, further exacerbated by the recent electricity price hikes. Estimates suggest a 4.5% increase in electricity costs, resulting in additional cost of goods sold, potentially leading to a 23% decline in the industry's profit before tax.The steel industry is experiencing consecutive periods of suffered lossesSeveral steel enterprises in Vietnam have been consistently operating at a loss in 2023. Recently, SMC Trading Investment Corporation reported its business results for the third quarter of 2023, with a revenue of 3,141 billion VND and a net loss of 164 billion VND. Cumulatively for the first nine months of the year, the revenue reached 10,574 billion VND, marking a 44% decrease compared to the same period last year and a loss of 549 billion VND.One of the pioneering steel enterprises in the Vietnam steel industry, Vietnam Steel Corporation (VNSteel), recently released its consolidated financial report for the third quarter of 2023, achieving a net revenue of 7,947 billion VND with a loss after tax of 172 billion VND. Accumulated over the first nine months of the year, VNSteel's net revenue reached 23.027 billion VND, a 24% decrease compared to the same period last year. The loss before tax was recorded at over 431 billion VND, whereas in the corresponding period last year, it was nearly 383 billion VND.Thai Nguyen Iron and Steel Joint Stock Corporation (TISCO) recently released its business results for the third quarter of 2023, reporting a revenue of 2,414 billion VND, a 25% increase compared to the second quarter of 2023. However, due to high production costs, the company still incurred a profit before tax of 57 billion VND. Overall, during the first nine months of the year, the enterprise achieved revenue of nearly 6,790 billion VND but recorded a loss before tax of 193 billion VND.In general, except for major players, most steel mills in the Vietnam steel industry have reported losses. The primary reason behind this is the weakened purchasing power due to the sluggish real estate and construction markets.An electricity price hike could potentially reduce steel industry profitsThe Vietnam Electricity Group recently raised the average retail electricity price to 2,006.79 VND/kWh (excluding VAT), marking a 4.5% increase from the previous rate of 1,920.3732, or an additional 86.41 VND/kWh effective November 9, 2023. With two price hikes this year, Vietnam Electricity Group has collectively increased the price by 142.35 VND/kWh. This increase in the cost of production inputs, such as electricity, could significantly impact the steel industry. Elevated electricity prices translate to heightened production costs, exerting substantial pressure on the profit margins of steel companies.Typically, electricity costs represent around 9-10% of the cost of goods sold for steel manufacturing companies. With a projected 4.5% increase in electricity costs leading to a rise in product costs, the overall profit before tax of the steel industry could potentially decrease by 23%. This significant decline in profits due to the additional electricity expenses noticeably affects the operational efficiency of businesses. However, if companies manage to offset the increased electricity costs by raising prices for consumers, it could potentially mitigate the impact of the rising input costs.Looking at the bigger picture, Vietnam Electricity Group's increase in retail electricity prices will lead to higher production costs for steel manufacturing enterprises, thereby reducing their profits. This might have a certain impact on the operational activities of these individual enterprises as well as the steel industry as a whole.

After a thorough investigation, the US Department of Commerce has concluded that steel pipe products imported from Vietnam did not evade the anti-dumping and countervailing duties that the US applies to similar goods from Taiwan.It's known that on August 4, 2022, the US Department of Commerce issued a notice to initiate an investigation into the circumvention of trade defense duties on certain steel pipe products. Primarily, products falling under HS codes 7306.61 and 7306.30 were imported from Vietnam, with allegations that Vietnam imported the main raw material for producing the steel pipe hot-rolled coil from China, Taiwan, South Korea, and India, then performed simple processing to manufacture the steel pipes, which were subsequently exported to the US. This process was purportedly aimed at evading the corresponding anti-dumping and countervailing duties that the US applies to these countries and territories.This investigation was conducted following suspicions that goods from Vietnam were being sold at lower prices to evade anti-dumping and subsidy tariffs. The investigation focused on determining whether these steel pipe products were manufactured at lower costs due to non-transparent subsidies.After conducting an investigation and gathering information from relevant parties, the United States recently reached a significant conclusion regarding the anti-avoidance duty investigation related to the import of steel pipes from Vietnam. According to the announcement from the US Department of Commerce, following a thorough investigation, it was concluded that steel products imported from Vietnam did not evade the anti-dumping and countervailing duties that the US applies to similar items from Taiwan. This determination was based on Vietnam not using hot-rolled coil steel from Taiwan to manufacture the steel pipes.For other steel pipe products also under investigation for anti-avoidance measures (initiated on July 29, 2022), on July 20, 2023, the US Department of Commerce announced an extension of the deadline for issuing the final determination until November 2, 2023. Recently, on November 9, the US Department of Commerce published the final determination on the case. In this final determination, the US Department of Commerce maintained the same conclusion as the preliminary finding issued in April 2023.However, the Ministry of Industry and Trade noted that the US Department of Commerce continues to allow Vietnamese exporters (except for companies determined by the US Department of Commerce to not fully cooperate during the investigation) to participate in the mechanism of self-certification, confirming that they do not use hot-rolled coil steel originating from China, Taiwan, South Korea or India to be exempt from measures.In fact, the US investigation into anti-avoidance duties isn't just a message about fair trade management, it's also evidence of the tension within international trade relations, particularly amidst escalating trade tensions between nations. This also presents new challenges and opportunities for steel pipe manufacturing enterprises in Vietnam to adjust their business strategies, enhance fair competition advocacy, and comply with international trade regulations.Given these developments, understanding and adhering to international regulations, as well as fostering a fair competitive environment, have become crucial factors for businesses to thrive and adapt in an increasingly volatile international market.