But supply continue to increase
According to statistics of Vietnam GSO, total crude steel production in the first five months of Vietnam reached 1.4 million tons, up 1.5% year-over-year. The prodcution of other steels such as: rolled steel and angle steel also witnessed an increase during this period of time.
In the first half of 2015, the Vietnam Steel Corporation contributed the largest sales at over 696,000 tonnes, accounting for 22.7% of market share, followed by Hoa Phat Steel JSC at over 675,000 tonnes (22.1%), Pomina Steel JST at over 407,000 tonnes (13.3%) and Vinakyoei Ltd., Co at over 246,000 tonnes (8.06%).
During the period, steel pipes sales saw impressive growth with over 664,000 tonnes consumed, a 34.7% rise over a year earlier. This figure included over 80,000 tonnes for export.
The Hoa Phat Steel Company had the largest consumption of steel pipes at 145,300 tonnes, holding 21.85 per cent of the total steel tube consumption, followed by Hoa Sen (130,528 tonnes).
6 months of the years up to June, 2015, steel import of Vietnam amounted 6.9 million tons with imported value of $ 3.8 billion, increased by 38.6% in volume and by 14.1% in turnover over the same period of 2014. Meanwhile, in the first half of the year, Vietnam exported only 1.2 million tones of steel, earned $ 873 million. In the first six months the VSA's member companies exported 175,543 tonnes of steel, 5 per cent lower than in the same period last year.
Opportunites and challenges from FTAs
Experts said free trade agreements (FTAs) would bring more opportunities and also challenges to local steel producers because the FTAs open more export markets, but cause challenges to local consumption.
Nguyen Van Phong, deputy general director of the NS BlueScope Steel Viet Nam, said the local galvanised steel industry would have more chances to export galvanised steel products due to advantages from the FTAs, though local steel exporters should be ready to face safeguards in countries participating in the FTAs.
Tran Tuan Duong, general director of Hoa Phat Group, said the FTAs offer opportunities and challenges, so local steel producers should reduce production costs and selling prices, and improve production management during the integration process into the world economy.
How to continue for growth
To gain efficiencies in exports, the producers should study regulations on taxes and schedules of cutting taxes under the FTAs at export markets to avoid lawsuits for dumping Vietnamese steel products in export markets.
Meanwhile, the producers should improve their competitive abilities, including quality, price and services, to maintain their growth production and business after the FTAs come into effect.
To assure continued sustainable development, local steel producers should update technology and equipment, improve corporate management and reduce production costs to reduce selling prices of products. They should also increase knowledge about safeguard measures to avoid commercial lawsuits.
Further, domestic steel industry should develop large steel producers that have financial and technological abilities and an annual capacity at 2-3 million tonnes to compete with import products in the future.
