2.

Market trends and outlook

2.1

Imports and exports

Vietnam imports a substantial amount of steel from other countries in order to have an adequate
supply of input materials for production and fully satisfy domestic demand. In 2014, the level of
imports of iron and steel products rose by 29.5% to 12.15mn tonnes due to increased market
demand for steel. Exports of steel products surged by 23.3% to 3.12mn tonnes, mainly
attributed to export promotion schemes (Chart 5).
Iron and steel ranked fourth among Vietnams main imported items in 2014. The value of import
of iron and steel products were on the uptrend and peaked in 2014 (Chart 6). Total import
turnover reached around USD 9bn, according to SEAISI. The huge steel products imported to
Vietnam in 2014 included HRC and construction steel products (boron and non-boron added).
Export turnover reached more than USD 2.8bn. Thus, the importation of steel products in 2014
was USD 6bn, according to SEAISI. In 2015, export turnover is expected to grow by 10%. As in
other regional nations, Vietnams steel industry has been continuously affected by the huge
importation from China, such as billet; galvanised sheet and coated sheet; bars and wire rods.
Moreover, countries are trying to use trade measures to prevent imported steel products in
support of domestic producers.

Mn tonnes

Chart 5: Vietnam import and export of iron & steel products (2004-2014)

3.13
1.66

0.48

1.36

7.36

8.44

9.04

8.73

2007

2008

2009

2010

2.07

0.30
0.06

0.15

0.19

4.98

4.80

4.88

2004

2005

2006

2.17

2.54
12.15

Import

7.08

8.25

9.38

2011

2012

2013

2014

Export

Source: SEAISI

USD bn

Chart 6: Vietnam import value of iron & steel products (2004-2014)

9
8
7
6
5
4
3
2
1
0

7.7
6.9

6.4

6.2

2004

3.0

3.0

2005

6.0

5.4

5.2

2.6

6.7

2006

2007

2008

2009

2010

2011

2012

2013

2014

Source: CEIC

Steel

Vietnam

Vietnams import of long products saw a robust increase of 48% to 2.25mn tonnes in 2014.
Import of wire rods, sections and bars surged 53%, 57% and 24%, respectively, while hot-rolled
coils (HRC) also increased substantially by 23% to 6.4mn tonnes. Import of flat products has
shown an increase of 22% to 9mn tonnes. Import of hot-rolled plate (HRP) surged 58% to
1.29mn tonnes. On the contrary, import of cold-rolled coil (CRC) declined 20% y/y to 505,000
tonnes (Table 12). Major sources were Japan and China.
Major sources of import were from China (6.35mn tonnes), Japan (2.28mn tonnes), Korea
(1.44mn tonnes) and Taiwan (1.11mn tonnes). Around 75% of total section import was from
China and the volume increased by 34% y/y. Around 80% of wire rod import was from China
and the volume jumped by 45% y/y, while around 60% of bar import was also from China. HRC
import from China and Japan saw significant increases.
Table 12: Vietnam imports of iron and steel products (metric tonnes) (20102014)
2010

2011

2012

2013

2014

Iron products (Pig iron)

21,047

74,387

51,441

30,000

57,000

Ferro alloys

31,241

30,306

55,040

217,000

Semi-finished products (Billet)

1,853,600

847,108

470,000

366,000

598,000

Hot-rolled steel products

5,902,600

5,203,401

6,173,000

7,295,000

9,625,000

172,000
75,500
512,800

283,274
120,305
386,620

220,000
115,000
420,000
571,000

20,000
26,000
314,000
161,000
735,000
819,000

35,000
63,000
492,000
199,000
1,127,000
1,294,000

4,413,202

4,847,000

5,220,000

6,415,000

328,600

383,161

718,000

632,000

505,000

328,600

383,161

347,000
371,000

431,000
201,000

324,000
181,000

Coated sheets & strips

387,000

334,211

573,000

693,000

763,000

Pipes & tubes

109,400

60,252

104,000

171,000

162,000

34,800
74,600

25,346
34,906

64,000
40,000

116,000
55,000

107,000
55,000

Cold finished & cold formed

(Steel wires)

98,600

146,206

109,000

194,000

222,000

Total iron & steel products

8,732,088

7,079,032

8,253,481

9,381,000

12,149,000

Rails & accessories

Steel sheet piles
Sections
Bars
Wire rods
Plates
Hot-rolled sheets & strips
(carbon steel / alloy)

Cold-rolled sheets & strips

-

Carbon steel
Stainless steel / alloy

Seamless
Welded

5,142,300

Source: SEAISI

Export of long products increased 27% y/y to 762,000 tonnes in 2014, while exports of sections
jumped from 79,000 tonnes to 116,000 tonnes. On the other hand, the countrys export of bars
declined sharply by 44% to 260,000 tonnes, while wire rod exports dropped by nearly half of the
volume in 2013. Export of flat products remained unchanged at 1.6mn tonnes. Export of CRC
increased significantly by 32% y/y to 522,000 tonnes. Export of coated products dropped 29% in
volume to 596,000 tonnes in 2014 (Table 13). Major export markets were to ASEAN countries of
Indonesia (0.43mn tonnes), Thailand (0.31mn tonnes), Malaysia (0.251mn tonnes) and
Philippines (0.25mn tonnes).

Steel

Vietnam

10

Table 13: Vietnam exports of iron and steel products (metric tonnes) (20102014)
2010

2011

2012

2013

2014

Iron products (Pig iron)

25,225

19,658

300

100

74,000

Ferro alloys

27,291

53,201

79,000

300,000

Semi-finished products (Billet)

11,300

221,956

365,000

354,000

392,000

Hot-rolled steel products

967,500

1,149,358

476,000

740,000

726,000

20,600
160,300

786,000

27,454
292,336

829,568

54,000
360,000

33,000
29,000

79,000
468,000

193,000

1,000
116,000
260,000
274,000
30,000
45,000

50,700

123,681

497,000

395,000

522,000

50,700

123,681

421,000
76,000

370,000
25,000

448,000
74,000

Coated sheets & strips

226,700

385,152

485,000

803,000

596,000

Pipes & tubes

36,300

95,611

203,000

207,000

427,000

7,500
28,800

10,444
85,167

12,000
191,000

18,000
189,000

23,000
404,000

14,800

24,290

60,000

36,000

88,000

1,359,816

2,072,907

2,165,300

2,535,100

3,125,000

Rails & accessories

Sections
Bars
Wire rods
Plates
Hot-rolled sheets & strips
(carbon steel / alloy)

Cold-rolled sheets & strips

-

Carbon steel
Stainless steel / alloy

Seamless
Welded

Cold finished & cold formed

(Steel wires)
Total iron & steel products
Source: SEAISI

2.2

Tax regime

In the tax reduction roadmap, import duty tariffs from ASEAN will be reduced to 0% by Dec 31,
2015. This will reduce Vietnams protection of domestic steel market. Vietnams steel industry
has suffered from the hefty import volume of Chinese steel at unfair prices. Vietnam exempts
alloy steel with chromium from import tariffs while non-alloy steel products are taxed at 9%.
Many Chinese exporters thereby claim their products contain 0.3-0.4% chrome content to enjoy
the tariff exemption. But the very small chrome content does not affect the quality of steel billets,
businesses can turn them into steel products used for construction, instead of importing the
highly-taxed non-alloy steel billets, according to the VSA. Taking advantage of the loopholes,
1.2mn tonnes of alloy steel billets were imported into Vietnam in Jan-Sep 2015, 75% of which
came from China.
Table 14: Vietnam import duties of selected steel products under AFTA and ACFTA
Products

AFTA

ACFTA (China)

2006-13

2014-15

2006-13

2014-15

Scrap of alloy steel

0%

Bars and rods of non-alloy steel

5%

0%

0%

0%

5%

18%

9%

Wire of iron or non-alloy steel

Welded tube of stainless steel

0%

0%

5%

5%

5%

5%

5%

5%

Sources: VPBank Securities (VPBS) Research; Ministry of Finance

Steel

Vietnam

11

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