Steel News

Tensions in trade between Turkey and the EU have always been a never-ending matter. Recently, on April 18, 2023, the European Commission expanded an investigation against the sale of hot rolled stainless steel prices from Turkey due to suspicions about the origin of these items from Indonesia.1. EU accuses Turkey's support of cheating for Indonesian steel to enter the marketThe EU  has discovered that Turkey's HRSS (hot roll stainless steel) has been disposed of before being dispensed to the European market. This has raised doubts when the origin of this item comes from Indonesia, which is considered a severe circumvention of the anti-dumping duty.Statistical table of SSR import volume from Turkey and Indonesia to the EU marketIn October 2020, the European Commission imposed an anti-dumping duty on hot-rolled stainless steel imported from Indonesia at a rate of 17.3%.However, on June 17, 2022, the European Commission received an investigation requesting signs of anti-dumping tax evasion from Indonesian manufacturers. Products investigated in the following codes: HS 7219 11, 7219 12, 7219 13, 7219 14, 7219 22, 7219 23, 7219 24, 7220 11, and 7220 12.Some data provide that there has been a significant change in the volume import of stainless steel plates (the primary raw material for the production of hot-rolled stainless steel) from Indonesia to Turkey and the volume of exports of hot-rolled stainless steel surged from Turkey to the European market. The European side believes that Indonesian manufacturers have circumvented the law by changing the location of product assembly and borrowing from consignment in Turkey to avoid anti-dumping tax.Statistical table of imported stainless steel plates from Indonesia to the Turkey market2. Some responses from Turkish steel exportersAfter the announcements, Çolakoğlu - a steel exporter in Turkey argued against it. He said it was an absurd and unfounded decision when the EU only relied on statistical data about Turkey's hot-rolled stainless steel imports and the number of stainless steel plates from Indonesia to conclude.In addition, other exporters in Turkey claim that importing stainless steel plates from Indonesia is a normal commercial activity as it helps Turkey steel factories have more diverse input materials. In the opinion of Turkey's steel exporters, the EU's expansion of investigation measures and the imposition of anti-dumping duties on Turkey will give them more losses than benefits they receive. Specifically, the price will be increased many times; the most damaged person is still the end user in the region, which seems to go against the interests of the Alliance.3. What is the direction for steel exporters in the EU market?Europe has long been recognized as an essential market with much potential but is fraught with strict barriers. One of the typical challenges is the level of tariff quotas for imported steel and numerous recent trade remedy lawsuits.From the perspective of Vietnam - one of the countries with outstanding export development, steel is a commodity getting involved in trade remedy lawsuits quickly. Although Vietnam's steel export situation still faces trade remedies in Europe, opportunities still exist for Vietnamese steel manufacturers.Until now, Vietnam has 15 contracts of Free Trade Agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam-EU FTA (EVFTA), etc. Depending on this covenant, import tariffs are reduced significantly compared to other countries in the region.As for anti-dumping, steel products imported from Vietnam to the EU are complementary and not in direct competition. The reason is that the import proportion of Vietnamese steel enterprises is still relatively low, so it is not enough to threaten the competition of manufacturers in the region. 

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 2023The 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 2023Despite 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.

The World Steel Association has released its short-range outlook for steel demand (SRO) forecast for 2023 and 2024. Accordingly, in 2023, the demand for recovery in the steel industry will be 2.3%, and in 2024, it will be 1.7%.Overview of the world steel industry2022 has been a challenging year for the steel industry worldwide as it has been affected by the Russia-Ukraine war, high inflation and rising interest rates, and China lockdowns due to the heavy impact of COVID-19.These events have a massive impact on the steel industry as rising energy prices cause manufacturing industries to reduce output, causing disruptions to the global steel supply chain.The above impacts, along with China's being affected by COVID-19, will limit the recovery of steel demand in 2023. In 2024, the growth of the steel industry will be impacted by countries with developing economies.China - The world's leading steel industryDue to the impact of the epidemic, in 2021 and 2022, China's steel demand fell sharply. For the first time in 25 years, China's real estate projects are in negative territory. This decline will seriously impact the steel industry and construction activities in 2023–2024.In 2022, China's steel exports were relatively good, but production activity was weak. 2023–2024, the steel industry manufacturing sector is expected to recover. After falling 3.5% in 2022, China's total steel demand is expected to grow 2.0% in 2023; it is not expected to change in 2024.Developed economiesIn 2022, developed countries will have strongly recovered from the COVID-19 pandemic. Steel demand in these countries fell sharply due to reduced construction activity and infrastructure investment, inflation, rising energy costs, and the effects of the war between Russia and Ukraine, especially in the EU and the US. The prospect of steel industry growth in 2023 is not favorable when it is still affected by the war between Russia and Ukraine, and the EU is the directly affected area. Steel demand in developed countries is expected to grow by 1.3% in 2023 and recover 3.2% in 2024 after falling 7.9% in 2022.Developing economiesIn developing countries, the resilience of the steel industry is more challenged as rising inflation impacts the monetary tightening cycle. In the coming years, the economies of developing countries will face challenges from external factors such as the Russia-Ukraine war and US monetary tightening. Despite many difficulties, the steel industry of emerging countries is still recovering under the influence of the government. After falling by 0.3% in 2022, steel demand in emerging economies will grow by 3.6% in 2023 and 3.9% in 2024.Vietnam is one of the countries with a developing economy. Under the influence of the government, Vietnam's steel industry gradually recovered after a series of days affected by COVID-19. Promoting investment in critical projects in the country is one of the bright spots for recovering the country's steel industry. Vietnamese steel enterprises also boosted their exports to potential markets to bring in foreign currency revenue and recover the steel market.

According to a recent European Steel Association (Eurofer) report, steel consumption in the EU will rise again in 2024 at a rate of 5.4%. This is a positive sign for the European Union economy when the growth of steel demand will stimulate investment activities in construction and automobile production.The energy crisis directly affects steel consumption in the EUSince the war between Russia and Ukraine has taken place, energy prices here have been affected strongly when Russia decided to cut off gas supplies in retaliation for sanctions from the EU.Specifically, in September 2022, energy prices in Europe peaked when inflation reached 40%, which caused gas prices to increase 15-20 times compared to the normal level. High gas prices mean that electricity will be more expensive, energy costs often account for 25%-30% of product costs, and pressure from input material has stopped many steel manufacturers in the area.The specific data of energy inflation in Europe from 2020 - 2023Faced with the shortage of gas energy sources, the Association of Steel Manufacturers has simultaneously called on the government to sponsor anti-crisis policies. In February 2023, the crisis situation showed signs of abating when energy inflation in Europe was only 16.6%. Thanks to government support, dependence on energy from Russia has reduced, and convenient weather in winter has helped decrease energy consumption in Europe. In early 2023, energy prices in the EU fell to roughly the same level as at the period when Russia began attacking Ukraine.The recovery of the construction and automobile industry stimulated steel demandThe construction and auto industries are typical sectors that account for a large percentage of steel consumption in the EU market. Specifically, the construction industry, which accounts for 35% of the total EU steel demand, has shown signs of recovery in 2022. Although the recovery has returned, the growth rate is assessed to be slow due to tight monetary policies and inflation is still there.The market share of the steel-consuming industries in EuropeEU car production started to grow in the second half of 2022, however, consumption volume declined due to pressures from the lack of manufacturing components and the loss of consumer confidence after the time of the energy crisis.According to many reports, the number of car registrations in the region is expected to continue to grow by 5% in 2023. Experts predict that the steel consumption for the automotive sector will increase clearly by the production orders remaining from 2022. The lack of energy caused many manufacturing plants to temporarily close, leading to a lot of uncompleted production orders.Some predictions come from the World Steel Association, global steel demand in 2023 will increase by 2.3% compared to 2022, reaching 1822 billion tons. Many experts expect this number to continue to rise in a more positive direction in 2024 with a growth rate of 1.7% compared to 2023, to 1854 billion tons.Opportunities for Vietnam before the recovery from steel consumption in the EUAlthough the problem of gas shortages in Europe has been minimized thanks to the sponsor from the government, this will not be a viable solution in the long term. The pressure of the lack of input materials will slow down the growth of steel production in the EU, and this domino effect will approach other manufacturing industries that depend on steel.By the end of 2022 and the whole of 2023, Europe will need to depend on imported sources of HRC steel, galvanized steel, and long steel to further serve the steel consumption for construction and manufacturing industries in the region. This will be an excellent opportunity for Vietnamese steel businesses because this country is also one of the few steel importers that have not been taxed on trade remedies in the European market. Currently, the EU is imposing an import quota of about 2 million tons per year for Vietnam in the period from July 2021 to June 2024. 

On June 2, 2023, the Safeguards Committee of the World Trade Organization (WTO) announced that the European Union would continue to extend safeguard measures in the form of tariff quotas (TRQs) for some steel products imported from Vietnam for an additional year. The EU decision is in effect from July 1, 2023, to the end of June 2024.According to the notice of the WTO, the European Union accused cheap steel products imported from abroad will continue to cause severe damage to domestic producers. Therefore, they asked to apply trade remedies because the EU's domestic steel industry has taken many measures to deal with the increase in imported steel products into the domestic market.Based on the Commission's Implementation Regulation 2021/10291, the EU issued a Decision to extend safeguard measures applied to imported steel products through tariff quotas. Accordingly, the European Commission allocates specific and common quotas for each country for the remaining countries. Imports over the percentage are subject to an additional 25% duty.Vietnam, along with other countries, has exported steel to the EU market subject to quarterly tariff quotas for eight types of steel, including hot rolled steel plate (group 1), electrical engineering steel plate (group 3B), galvanized steel plate (group 4A, 4B), organic coated steel plate (group 5), stainless cold-rolled steel plate (group 9), large steel pipes (group 25B) and other steel pipes (group 26). For other groups of steel products, Vietnam is exempted from safeguard measures according to the criterion that a developing country with a steel import market share of less than 3%.  The European Union is one of the regions that regularly applies trade remedies to imported goods globally. According to WTO statistics, by the end of June 2022, the EU had investigated 644 cases and applied 408 trade remedies. Currently, the EU only uses safeguard measures related to steel products for Vietnam. In the next stage, Vietnamese manufacturers need to contact EU and Vietnamese authorities to fulfill their obligations to declare, cooperate and provide sufficient information to protect their rights tariff rate, not allowing steel products outside the above eight groups to be determined to exceed 3% of the market share.Previously, on March 26, 2017, the European Union launched an investigation into some imported steel products. On July 18, 2018, the EU decided to apply a temporary safeguard measure on steel products classified under 23 product categories within 200 days. The out-of-quota tariff rate is 25%, depending on product type and origin.On July 1, 2020, the non-taxable quota was increased by 5%, effective until June 30, 2021. With the expiry of the term three years, the EU relaxed this measure by increasing the tariff rate quotas for all groups to 4% from July 1, 2021, to June 30, 2023. On February 2, 2019, the European Commission imposed official safeguard measures on 26 out of 28 product categories under investigation. Before exporting to the EU, the Vietnam Trade Remedies Administration suggested that enterprises actively control the export shipments within the remaining quota.If customers want to learn about the Vietnam steel market and import genuine steel products, please get in touch with MRS Steel via Whatsapp: +84 76 911 2358 for the best support. 

ArcelorMittal Kryvyi Rih recently halted its steelmaking and rolling operations due to water impacts following a dam failure at the Kakhovska Hydropower Plant. The production halt could affect Ukraine's steel industry in the near term. ArcelorMittal Kryvyi Rih has halted productionUkrainian steel and long steel producer ArcelorMittal Kryvyi Rih recently halted steel production and rolling activities. According to reports, the halt stemmed from the dam collapse at the Kakhovka Hydropower Plant due to suspected Russian influences. So far, no results have determined whether the production halt will affect Ukraine's steel industry prices.The plant has stopped production since June 6 and will resume operations if the water in Lake Kakhovka shows signs of decreasing. Meanwhile, blast furnaces, coke smelters, and iron ore mining operations continue to operate. The source also said that the business continues to deliver goods on schedule.The steel industry may be affected in the near futureThe dam is located on the Dnipro River in Ukraine's Kherson region. ArcelorMittal Kryvyi Rih steel mills use Lake Kakhovka's water during steelmaking and cooling. The dam collapse seriously impacted the downstream region and significantly affected steel production. However, there is no information shared about the amount of water that ArcelorMittal Kryvyi Rih consumes, but certainly, the amount of water consumed by the steel industry is not a small number. On June 7, ArcelorMittal Kryvyi Rih announced that there would be no water supply for production on June 8, forcing employees to work from home or take unpaid leave. The plant also said it would update the water supply situation daily to ensure operations could still occur.In the first 4 months of 2023, Ukraine's crude steel production decreased by 54% compared to last year. According to a report from the local steelmaking association, Ukr Metalur Prom, steel production fell from 3.93 million metric tons to nearly 1.81 million metric tons. With such a sharp decrease in steel output, the industry may increase prices soon.What opportunities exist for Vietnam's steel industry?ArcelorMittal Kryvyi Rih is stopping production due to the impact on the water supply after the dam collapse at the Kakhovska Hydropower Plant. The production stoppage means that the steel price in this market will increase. This is an opportunity for Vietnam's steel industry to export products to this potential market. With international-standard quality and a reasonable cost, Vietnamese steel will be a reasonable source for the Ukrainian steel market. Besides, the Ukrainian steel market was also affected by the Russia-Ukraine war. Several leading steel producers in Ukraine have plans to cut production output to a minimum due to delayed rail and port operations. This will create opportunities for the steel industry in other markets, typically Nam Kim, Hoa Sen, Hoa Phat, and Ton Dong A... with revenue growth mainly coming from exports to the EU market.Above is information about ArcelorMittal Kryvyi Rih's production cuts due to the impact of the dam failure at the Kakhovka Hydropower Plant. The dam's collapse led to decreased steel output, which is also an opportunity for the Vietnamese steel industry to export steel to this market. If you need to buy Vietnamese steel, please contact us here. We ensure that we provide quality steel products at a reasonable cost.