Vietnam’s steel industry will recover strongly at the end of this year

Vietnam’s steel industry will recover strongly at the end of this year

Steel NewsDate: 19-06-2023 by: Nhu Quynh

Although 2023 is a year with many difficulties and challenges, the steel industry in Vietnam still has optimistic signals and is likely to recover by the end of the year.

Steel industry growth in Vietnam 2023 

According to the Vietnam Steel Association (VSA), in the first quarter of 2023, the steel industry produced 6.692 million tons of finished steel products, down 20.9%; finished steel consumption will reach 6,068 million tons, down 25.4% compared to the first quarter of 2022.

In the first two months of 2023, Vietnam’s steel industry exported about 1.425 million tons of steel, up 6.85% over the same period in 2022. Export value reached 1.031 billion USD, down 26.73% over the same period last year. Vietnam's steel export market share in the first 2 months of 2023 in the markets of ASEAN (37,31%), the EU (20%), India (9,34%), Turkey (7,32%), the US (6,39%), and other (19,64%).


Vietnam's steel export market share in the first quarter of 2023

The steel industry has gone through the most challenging period and is on the path to recovery. However, VSA still believes that Vietnam's steel industry faces many difficulties and challenges that may last until the second quarter of 2023. However, Vietnamese steel enterprises still try to invest and seek new orders to recover previously affected business results. For example, in early 2023, Hoa Phat will record many export orders to markets in the Americas, Asia, and Australia. Steel export volume (steel bar, construction coil, and high-quality coil) in January 2023 will reach 46,000 tons.

The bright spot for the steel industry at the end of 2023

Despite being forecast with many difficulties and challenges, steel industry enterprises still have many growth drivers visible in 2023.

According to the World Steel Association (WSA), world steel demand will increase by about 1%, with the ASEAN region leading the growth in steel consumption thanks to a substantial investment orientation in infrastructure. This is expected to be the main export market for Vietnam in the near future. In addition, the demand in the domestic civil construction sector will significantly impact the demand for steel. In 2023, the Vietnamese government increased the disbursement of public investment capital in key projects such as the North-South expressway, Long Thanh Airport, and major logistics ports. In addition, the government has also approved credit packages for social housing projects. The focus on promoting the development of construction projects will stimulate demand for the steel industry to prosper at the end of the year.


Besides, there are positive signals from the export market when the world's largest steel industry - China- stabilizes and promotes investment to boost the economy. The country has rolled out a series of stimulus policies, especially in the real estate market, to support an economy that is already constrained by strict measures to contain COVID-19 for most of 2022. This is also a potential steel industry market where Vietnam can boost steel exports in the near future.

Energy shortage in Europe due to Russia's minimizing gas supplies to this region. The reduction of energy causes a number of energy-intensive industries to reduce productivity and output, including steel production. This creates opportunities for Vietnam's steel industry to boost exports to this market.