The Vietnamese Steel Industry Is Expected To Recover In 2024

The Vietnamese Steel Industry Is Expected To Recover In 2024

Steel NewsDate: 02-11-2023 by: Nhu Quynh

The Vietnamese steel industry has faced many challenges in recent years, and 2024 is expected to mark a hopeful period with the prospect of significant recovery and growth. The recovery in the steel sector is not only crucial for the Vietnamese economy but also plays a vital role in ensuring energy security, enhancing employment opportunities, and promoting the sustainable development of the nation.

The recent situation of the steel industry

The recent situation of the Vietnamese steel industry has witnessed numerous fluctuations and challenges. Previously, the steel industry underwent significant development over the past decade, creating many opportunities and making a substantial contribution to the national economic growth. However, in recent years, it has faced several difficulties.

One of the biggest challenges that the Vietnamese steel industry has to confront is the pressure from international competition. Steel products from large manufacturing countries such as China, India, and South Korea compete strongly in the global market, especially after the United States imposed protective tariffs and restrictions on steel imports.

Furthermore, the prices of raw materials, such as iron ore and manganese ore, have increased, leading to cost pressures in production. This raises questions about the competitiveness of the Vietnamese steel industry in the context of rising raw material prices.

The COVID-19 pandemic has also had a negative impact on the steel industry. Disruptions in the supply chain and production limitations have created challenges in maintaining steel production and product supply.

Despite these challenges, the Vietnamese steel industry remains determined and makes efforts to adapt and overcome them. The government has also implemented several support policies to help stabilize and develop the sector. Expectations for 2024 are a strong recovery and growth, with hope that the efforts of the Vietnamese steel industry will continue to contribute to the sustainable development of the nation.

The steel industry and the signs of resurgence

According to statistics from the Vietnam Steel Association, in the first 9 months of the year, the Vietnamese steel industry has seen some bright spots thanks to flexible policies and measures aimed at stimulating economic growth established by the government and state agencies. Among these measures, there is a notable increase in the disbursement of public investment, especially in the transportation infrastructure sector.

As a result, the production of finished steel in the first 9 months of the year reached 20.179 million tons, with a consumption of finished steel reaching 18.978 million tons. While both production and consumption have shown a tendency to decrease compared to 2022, the Vietnamese steel industry is gradually recovering in the subsequent period. In September 2023, the Hoa Phat Group alone consumed 596,000 tons of semi-finished steel, construction steel, and hot-rolled coil steel, representing a 7% increase compared to August 2023. Construction steel saw the highest increase since the beginning of the year, reaching 352,000 tons, a 15% increase compared to August 2023.

Despite the growth observed in recent times, representatives from the Vietnam Steel Association note that the market demand for steel products in general is still weak and hasn't seen significant improvement. With the return of certain industrial and construction projects, the Vietnamese steel industry is expected to pick up in the coming months compared to the previous months.

Expectations for 2024

In 2024, there is a promise of being a pivotal year that can propel the Vietnamese steel industry back onto the growth track. Below, MRS Steel lists some key factors contributing to this positive outlook:

Better Export Opportunities: Vietnam has entered into several significant trade agreements, such as CPTPP, RCEP, EVFTA, which open up opportunities for the Vietnamese steel industry to export to stronger and more diverse international markets.

Technological Advancements and Productivity Improvement: The Vietnamese steel industry is investing in improving production technology and enhancing productivity. The application of efficient processes and advanced technology can help reduce production costs and create high-quality products, thereby improving competitiveness in the international market.

Supportive Policies: The Vietnamese government has implemented various supportive policies to boost the steel industry, including the application of protective tariffs and other measures to safeguard domestic production from unfair competition. These measures can help the Vietnamese steel industry create a stable environment for sustainable development.

Increased Domestic Demand: As the economy rebounds after the COVID-19 pandemic, there is a growing demand for construction and infrastructure. This leads to an increased demand for the use of domestic steel products, helping the Vietnamese steel industry to recover and grow.

2024 marks a hopeful period for the Vietnamese steel industry. Factors such as export opportunities, technological advancements, supportive policies, and increased domestic demand can drive a strong recovery and growth. The development of the steel sector not only benefits businesses within the industry but also makes a significant contribution to the sustainable development of the Vietnamese economy.