Vietnam is seeing an influx of hot-rolled coil (HRC) steel imports although the Ministry of Industry and Trade has launched an anti-dumping probe into steel products imported from China and India.

In September alone, the country purchased 1.2 million metric tons of HRC steel, surging 34 percent month on month and 2.2 times higher than the volume of locally-produced HRC steel, according to the General Department of Vietnam Customs. 

This has caused a serious imbalance and put pressure on domestic steel producers, such as Hoa Phat, Hoa Sen, and Dong A.

In January-September, Vietnam imported nearly 8.8 million metric tons of HRC steel, up 26 percent year on year.

HRC steel imported from China made up 72 percent of Vietnam's total steel imports. The Chinese steel was priced $30-70 per metric ton lower than that from other markets.

This is largely due to China's steel overproduction, which has led to increased exports at low prices in an effort to reduce its excess inventory.

The influx of cheap Chinese steel has created significant challenges for Vietnamese steel producers, pushing many to the brink of cutting back production.

Dr. Hoang Ngoc Thuan from the Foreign Trade University told Tuoi Tre (Youth) newspaper that if the situation prolongs, domestic production will completely depend on imports, posing a risk to the local economy.

According to economist Ngo Tri Long, steel production is a key economic sector. Without measures to protect the domestic market, Vietnam’s steel industry may be hurt.

Vietnam is capable of producing 29-30 million metric tons of steel per year, exceeding the domestic demand.

However, steel imports are cheaper, reducing the market shares of some domestic producers.

Stronger trade remedies needed

Amid the influx of steel imports, the Ministry of Industry and Trade initiated an anti-dumping probe into steel products imported from China and India on July 26.

However, the investigation may last for a year, while steel imports are still inundating the domestic market.

At a forum on trade remedies in Ho Chi Minh City on October 11, Dinh Quoc Thai, vice-chairman of the Vietnam Steel Association, stressed that Vietnam’s steel industry was once on the brink of bankruptcy in 2013-17 because of the huge volume of imports from China.

Thanks to trade remedies applied since 2020, Vietnamese steel enterprises have recovered and improved revenue.

However, the current situation is threatening them.

To protect the local steel sector, it is necessary to accelerate anti-dumping investigations into steel imports and enhance inspections and supervision of inbound shipments.

Support policies are essential for domestic HRC steel production to help local firms compete with foreign rivals.

Without strong trade remedies, low-cost steel imports will continue weakening Vietnam’s steel industry, affecting thousands of laborers and sectoral development in the future, according to economists.

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