Steel industry to see tougher competition with newcomers

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Five new steel mills with a combined capacity of 1.5 million tons per year will start operations this year, making supply further exceed demand and leading to a fiercer competition in the local steel market. The steel mills of Thai Trung Steel Co. in Thai Nguyen, An Hung Tuong Steel Co. in Binh Duong, Middle Region Steel Co., Pacific Steel Co. and Dana-Italy Steel Co. in Danang are scheduled to begin production this year. With the additional capacity of these new plants, the total steel capacity of the country will rise to 11 million tons a year. The annual steel consumption in Vietnam is now some five million tons, less than half of the production capacity of domestic steel mills, said Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association (VSA). While Vietnam's steel exports are facing stronger trade defense in foreign countries, the fact that more steel plants will be put into operation this year will make the competition among local steelmakers more … [Read more...]

Chinese steel may flood Vietnam market

After the strong depreciation of the Chinese yuan, steel industry insiders have warned local steel producers that Chinese steel products could flood the Vietnamese market, causing difficulties for them. Vice-Chairman of the Vietnam Steel Association Nguyen Van Sua said although in recent years, the local steel industry has developed very fast, local importers still had to import a large volume of steel products and semi-finished products every year. Chinese steel products account for 60 per cent of the total steel imports. Sua said China's yuan devaluation would have both negative and positive effects. Local importers will be able to import steel at reasonably competitive prices. On the other hand, the yuan devaluation will lead to a flood of imported steel products from China such as construction steel, cold-rolled steel and corrugated steel, thus affecting the local market. Sua said the most effective measure to counter Chinese steel imports was to make Vietnamese steel firms … [Read more...]

Seminar discusses ways to optimise Vietnam-EAEU FTA

A seminar was held in Ho Chi Minh City on August 19 to discuss measures that domestic enterprises can apply to minimise impacts and optimise benefits from the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) that was signed in late May this year. According to Duong Hoang Minh, Deputy Head of the European Market Department under the Ministry of Industry and Trade, the FTA is expected to become operational in early 2016. Minh noted that the EAEU has committed to tax cuts to zero percent on nearly 90 percent of tariff lines, equivalent to 90 percent of the import value from Vietnam of the EAEU countries, which presents a great opportunity for Vietnamese products, especially seafood, apparel, footwear and farm produce. For example, he said, over 71 percent of seafood product types will enjoy tariff exemption immediately after the agreement becomes effective. However, Minh also warned that enterprises should carefully study the exemption and reduction of … [Read more...]

Businesses Need Active Involvement in Policy Making

The Vietnam Chamber of Commerce and Industry (VCCI) recently hosted a workshop on "Policy lobby in new context: Opportunities and challenges for businesses" in Hanoi. Mr Dau Anh Tuan, Director of VCCI Legal Department, said that over 70 percent of more than 1,000 legal documents issued each year relate to business, but up to 78 percent of enterprises have never been consulted on draft laws. Meanwhile, 66 percent of enterprises attribute policy risk as one of the three biggest risks that they face. Unstable policies and laws pose a major risk to businesses and they are well aware of the importance of their roles in policymaking. In reality, policy consultation is now focusing on big companies. Small and micro businesses are almost unaware of the existence of new policies. Even, some only know the existence of a policy when they are fined for violating such policy. Besides, the lack of opinion exchanges and consultations in the course of drafting is attributed to the enactment of many … [Read more...]

Low input prices encourage local companies

Low input prices encourage local companies (Photo:talkvietnam.com) The sharp decrease in prices of several kinds of raw materials has encouraged domestic companies to expand production activities, according to a source from Thoi Bao Kinh Te Sai Gon (Saigon Economics Times). Since late last year, the price of iron, copper and plastics in the world market has declined significantly. The price decline has helped domestic enterprises to reap high profits, particularly those involved in the plastics industry, such as Tien Phong Plastics Joint Stock Company (NTP), Tan Tien Plastic Package Company, Binh Minh Plastics Joint Stock Company (BMP), and Rang Dong Plastics Joint Stock Company. BMP Vice Chairman and General Director Nguyen Hoang Ngan said the price of plastic raw materials had decreased since late last year, with a sharp fall in the early months of the year. The prices of plastic raw materials were slashed by between 16 and 17 percent compared with last year's average … [Read more...]

Powerful Domain of Innovations for Mold Making and Plastics Manufacturing

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In general, AEC 2015 is likely to influence the automotive industry in distinct patterns: on one side, there is production in developed markets with an integrated supply chain while on the other side; there is production in developing markets that is mainly based on assembly of imported completely knocked-down (CKD) kits. Whether the automotive industry will grow in any pattern, it will take shape by the alignment and development together with the mold industry. Although Vietnam is labeled as the dawn of motorization, but there was a significant increase of 6.96 percent inVietnam's Gross Domestic Product in 2014, with the rise of auto-parts export playing a key role in driving the country’s economy. Increasing political and exchange-rate stability, along with promising gross domestic product growth have catapulted Vietnam to the top of many investors’ agendas, as Mr. Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed Tradex Co., Ltd. … [Read more...]

Vietnamese steel companies see improving production

The Vietnam Steel Association said that production and sales of its members have significantly improved thanks to recovering real estate market. Particularly, in the first half of this year, steel production reached 6.45 million tons, up 18.6 percent compared to the same period last year; the sales of steel hit 5.46 million tons, up 22.2 percent over the same period last year; and steel exports touched 846,000 tons, down 4.7 percent. Despite increase in production, domestic steel industry still faces difficulties due to excessive steel supply. The prices of domestic steel products have continuously dropped in accordance with losing trend of input materials. Most steel products have seen a decline of 5-10 percent in price in comparison to the beginning of this year. According to VSA, economic growth of China - the world’s largest market that controls global steel industry’s movements – has become stagnant, causing steel consumption to reduce while steel production … [Read more...]

Steel consumption sees sharp growth

Photo: CPV

(CPV) - Sales of steel products for construction reached over 3 million tonnes in the first half of the year, a year-on-year rise of 24.4%, reported the Vietnam Steel Association. Of this, 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. Hoa Phat Steel JSC saw the highest sales growth at 145,300 tonnes, accounting for 21.8% of market share. It was followed by Hoa Sen steel pipes at over 130,000 tonnes, making up 19.63%. According to the Vietnam Steel Association, the growth of the steel sector partially helped domestic producers reduce pressure on inventory and … [Read more...]

Vietnam’s domestic steel consumption up in H1

The domestic steel industry saw strong growth in consumption in the home market in the first half of this year, according to the Vietnam Steel Association (VSA). The association reported the purchase of building steel products gained a year-on-year surge of 24.4 percent to reach three million tones in the first half of this year. Vietnam Steel Corporation (VNSteel) had the largest consumption volume at 696,059 tonnes, accounting for 22.78 percent of the total domestic consumption in the first six months. The second largest producer was Hoa Phat Steel Company with a volume of 675,710 tonnes, Pomina with 407,426 tonnes and Vinakyoei with 246,262 tonnes. Meanwhile, the consumption of steel pipes also saw a growth of 34.7 percent in the first six months to 664,583 tonnes against the same period last year, the association said. The Hoa Phat Steel Company had the largest consumption of steel pipes at 145,300 tonnes, holding 21.85 percent of the total steel tube consumption, … [Read more...]

Taiwan investor fails to fund major steel mill

Quoc Hung A source from the Dung Quat Economic Zone Authority (DEZA) told the Daily on the phone last Friday that Guang Lian Steel Vietnam Co. Ltd. had told the provincial authority about its failure to find capital for the project. However, the company did not say where it would abandon the project. The provincial government and DEZA earlier told Guang Lian Steel to show credit contracts or prove financial capability for implementing the project by the end of June; otherwise, the project would be nullified. According to the source, the investor will have to stop work on the project and DEZA will then seek comments from relevant ministries and agencies to complete necessary procedures for revoking the investment certificate of the project. The investor has reportedly spent around US$42 million building some components like dorms for workers, ground leveling and fence construction since work started on the project in 2007. Experts questioned the future of the slow-moving steel … [Read more...]

Vietnam-EAEU trade pact opens opportunities and challenges

The Vietnam-Eurasian Economic Union Free Trade Agreement signed on May 29 is forecast to offer both ample opportunities and tough challenges to Vietnamese businesses. According to the agreement, Vietnam will have great opportunities to sell strong products to the Eurasian Economic Union (EAEU), encompassing Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. Aquatic products, garments and leather will be the key beneficiaries of the deal as they enjoy a zero percent tariff. Dang Phuong Dung, Vice President and Secretary General of the Vietnam Textile Association (VITAS) felt upbeat about Vietnamese textile and garments’ market share in the Union, predicting that two-way garment trade will grow by 50 percent the first year of the agreement’s implementation and 20 percent over the next five years. Vietnam will be the Union’s fourth provider of apparel from the current eighth place, she said. Thanks to the signing of free trade deals between Vietnam and the … [Read more...]

Vietnam complains to WTO about Indonesia’s safeguard tariff on steel

Bach Van Mung, director of the Vietnam Competition Authority under the Ministry of Industry and Trade, told

Vietnam last week requested that the World Trade Organization (WTO) consider Indonesia’s imposition of a safeguard tariff on its steel sheets. Tuoi Tre (Youth) newspaper last Tuesday that Vietnam had lodged a formal complaint to the WTO, and the global trade organization had also released a statement about it. According to Mung, Vietnam decided to take the case to the WTO following the failure in the bilateral consultation process in which Vietnam found that such unsatisfactory taxation imposition of Indonesia will have a bad influence on exports of flat rolled products of iron or non-alloy steel from Vietnam. According to WTO rules, Vietnam and Indonesia will have 60 days to consult with each other to settle the case, but if it is still not resolved, the WTO will adjudicate, Mung added. Earlier, according to Tuoi Tre sources, Indonesia decided to impose the tariff on flat rolled products of iron or non-alloy steel on the basis of absolute volume of imported steel, … [Read more...]

Huge steel project may lose investment certificate

Quoc Hung A source from the Dung Quat Economic Zone Authority told the Daily on June 3 that a deadline had been set. The authority said it and the government of Quang Ngai Province had told Guang Lian Steel to show credit contracts for the project this month; otherwise, it would lose the investment certificate. The source stressed it was more important for the investor to prove its financial capability than the majority shareholder E-United’s request to scale down the project’s capital to US$2 billion from US$3.3 billion. "Management agencies will deal with the slow-moving project based on the existing investment regulations if the investor continues the delay," the source said. The project was licensed nearly nine years ago but is now facing a mounting roadblock after Japan’s JFE Steel pulled out of the Guang Lian steel manufacturing venture with Taiwan’s E-United last year. The Vietnam Steel Association has expressed concern over the project, saying … [Read more...]

Vietnam brings Indonesia to WTO

Vietnam has taken Indonesia to the World Trade Organization for imposing ‘safeguard’ action against import steel products, said the Vietnam Steel Association. Previously, the Indonesian Ministry of Finance issued a circular on their own initiative imposing ‘safeguard’ tariffs on Vietnamese flat rolled products of iron or non-alloy steel without corresponding with the Vietnamese Government. A safeguard can be taken by a WTO member to temporarily restrict an import increase of a product which cause or threaten to cause injuries to domestic production. The Indonesian Trade Safeguard Committee (KPPI) has not abided by procedures related to the right of being informed to Vietnam while taking the safeguard action. It has also showed signs of violating conditions to apply the safeguard measure under the Safeguards Agreement. For instance, they have neither proved serious threats from the non-alloy steel to their domestic production nor fully analyzed other damaging … [Read more...]

Further Vision of Metalworking Industry at METALEX Vietnam 2015

Positive statistics indicate that Vietnam is still one of the fastest growing and increase of production bases for manufacturing industry.

Mr. Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed Tradex Co., Ltd.said that according to Nguyen Van Sua, Vice Chairman of Vietnam Steel Association (VSA) said that market’s overall of domestic steel growth in March and the first quarter reached to 2.5 million tonnes, its 25 percent increase. Steel industry produced 2.7 million tonnes, up 17 percent over last year. More than half of the steel consumed 1.29 million tonnes, it was construction steel, which we can see a year-on-year increase of 10.5 percent. Construction steel sold in March hit to 651,633 tonnes, increasing 160 percent over last month and by 14.4 percent compared with the same period last year. So the country's gross domestic product (GDP) edged up 6.03 percent in the first quarter, the industrial and construction sector posted growth of 8.25 percent. Also the Government has promulgated policies to support the country's economic development, including the property market, … [Read more...]

Collaboration to Strengthen Vietnam’s Supporting Industries to ASEAN

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Japan External Trade Organization (JETRO Hanoi), Vietnam Trade Promotion Agency (VIETRADE) and Reed Tradex on May 20 joint together again in contract signing ceremony to announce the co-located "The 6th Exhibition on Supporting Industries in Hanoi 2015" together with "Vietnam Manufacturing Expo 2015" in order to strengthen Vietnam’s supporting industry during 10 - 12 September 2015 at I.C.E. Hanoi (Cung Van Hoa), Hanoi, Vietnam.Mr. Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed Tradex Co., Ltd. said that nowadays, with Vietnam being the initial market for foreign investment combining with surge in local demand for industrial parts, it is vital for industrialists to understand the essential factors affecting the progression of supporting industries which plays a major role in the industrial development. While the arrival of AEC is imminent, we also have both challenges and opportunities to comply with, opportunities which rely on understanding … [Read more...]

Steel imports from China shoot up

Chinese steel landing in Vietnam in the January-April period has seen a yearly increase of 135.4 percent, which is in turn having an enormous impact on Vietnamese steel sector, said Nguyen Van Sua, Vice Chairman of the Vietnam Steel Association (VSA). According to a VSA report, Vietnam imported 292,000 tonnes of steel billets in the first four months of this year, mostly from China. It said that the number is forecasted to increase to a million tonnes. Domestic steel billet capacity reached 11 million tonnes, yet demands for these commodities only stands at 6.5 million tonnes this year. The VSA leader said that there has also been a significant escalation in the amount of imported Chinese so-called alloy steel products, including steel rod, steel wire and galvanised steel, exports of which are tax free from China. Meanwhile, there is surplus of those products from Vietnamese enterprises. Sua highlighted that steel enterprises need to implement reforms while making efforts to … [Read more...]

Malaysia investigates dumping of steel coils from Vietnam

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(VOV) - The Malaysian Ministry of International Trade and Industry (MITI) has launched an investigation into alleged dumping of steel coils imported from Vietnam and China, following a petition filed by FIW Steel Sdn Bhd (FIW). In a prepared statement, the MITI said it has received the petition from the Malaysian producer, requesting the imposition of dumping duties on imports of pre-painted, painted and colour coated steel coils from both Vietnam and China. The petitioner alleges these steel coils are being dumped into the Malaysian market at prices much lower than those prevailing in the domestic markets of Vietnam, China or Malaysia. Further, the petition alleges the anti-competitive practices are the direct and proximate cause of both the Malaysian steel coil industry and the petitioner specifically suffering material injury. In addition, the petition alleges the absolute volume of the imports from Vietnam is causing irreparable material injury to the domestic industry and … [Read more...]

Vietnam seeks FDI quality, not quantity

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Vietnam has licensed 448 new FDI projects worth US$2.67 billion in the first four months of the year, down 17.1% compared with the same period last year, and permitted investors to infuse US$1.01 billion in 167 existing projects. While the commitments may have shrunk from last year, the actual disbursement has risen by 5% to US$4.2 billion, according to the Foreign Investment Department. Authorities have been paying more attention to the "quality" rather than "quantity" of investment. "[While considering an FDI project] authorities should ignore the idea of ‘more the better'," said Phan Huu Thang, a former head of the department. Recently the central city of Danang rejected two multi-million dollar foreign projects over environmental issues. To ensure the city's sustainable development, Danang authorities have adopted policies to attract FDI in hi-tech projects and supporting industries with high value addition, especially in "clean" projects. Other provinces like Ba Ria … [Read more...]

Steel consumption improves in first quarter of 2015

Total steel sales of members in the Vietnam Steel Association hit 2.5 million tons in the first three months of this year, an increase of 25 percent over the same period last year. Steel consumption improved as real estate market has warmed up while macro-economy shows signs of recovery. However, steel was mostly consumed domestically as steel exports merely touched 92,000 tons, up 11 percent compared to the same period last year, accounting for 8 percent of total steel sales. Economic experts said that in the future when free trade agreements are implemented widely, local steel market will suffer certain effects. Therefore, local steel producers should be ready in order to cope with them. Especially, authorities should tighten quality control on imported steel and carry out measures in order to protect domestically-made products. In addition, local producers should also improve their technology and enhance managerial skills as well as competitive ability in the context of global … [Read more...]