Despite the Ministry of Industry and Trade conducting an anti-dumping investigation, hot-rolled coil (HRC) steel is still being imported into Vietnam in large quantities.
“Red alert” for imported steel
According to the General Department of Customs, the amount of HRC steel imported into Vietnam in September reached 1.2 million tons, an increase of 34% compared to August and 2.2 times higher than domestic production. In the first 9 months of 2024, Vietnam imported nearly 8.8 million tons of HRC, an increase of 26% over the same period last year and equal to 171% of domestic production. Of which, the amount of products imported from China accounted for 72% with 6.3 million tons, surpassing the amount of HRC steel of domestic production enterprises with 5.1 million tons.
Notably, the amount of HRC steel imported from China accounts for the majority of goods entering Vietnam, mainly because the selling price from this market is lower than other markets by 30 – 70 USD depending on the type of product. This stems from the fact that China has not yet escaped the “crisis of excess steel”, domestic consumption has decreased, forcing steel producers in this country to boost steel exports at low prices to release inventory, affecting the global steel industry.
It is worth noting that the amount of HRC steel is still flooding into Vietnam at a time when the Ministry of Industry and Trade is investigating the application of anti-dumping measures on a number of products originating from China and India. The anti-dumping investigation is taking place in the context of many countries applying defense measures on HRC products. For example, Thailand and Indonesia have applied defense measures on Chinese hot-rolled steel.
Specifically, from 2021, Thailand will impose anti-dumping duties on non-alloy hot-rolled steel coils imported from 18 countries and territories, of which the tax rate applied to Chinese HRC is 30.91% to protect the domestic steel industry. Most recently, in early August, the Thai Ministry of Foreign Trade concluded that the 30.91% anti-dumping measures will also be applied to alloy hot-rolled steel coils from China as an “expansion measure” for the HRC product group. In addition to anti-dumping duties, Thailand also applies most-favored-nation (MFN) duties and a number of other barriers and technical standards to manage the amount of imported hot-rolled steel coils and protect domestic production. The fact that Thailand and Indonesia have applied anti-dumping measures even though the steel production of these countries only meets 43% and 37% of domestic consumption demand, respectively, shows the importance of the HRC steel industry. Meanwhile, Vietnam’s domestic HRC production has met more than 70% of consumption demand, so it is impossible to ignore the massive influx of imported goods.
Notably, while HRC products of domestic enterprises are being “suppressed” by imported goods in the domestic market, the European Union (EU) has also initiated anti-dumping investigations on some hot-rolled steel products originating from Egypt, India, Japan and Vietnam since the beginning of August.
Associate Professor Dr. Ngo Tri Long, an economic expert, commented that the amount of HRC steel imported from China is 2.2 times higher than domestically produced steel, which is truly a “red alert” situation. The steel industry is always a key industry, important to any country, so it is necessary to encourage development and prioritize the protection of domestic production. Not to mention the huge consequences if domestic enterprises are fiercely competed by cheap imported goods, lose market share, have to reduce production, workers lose their jobs, thereby negatively affecting the overall economic development of the whole country.
Must intervene faster to protect domestic production
According to regulations, the anti-dumping investigation of imported HRC steel will take place within 1 year. Therefore, during this time, there is a possibility that imported goods will still flood into Vietnam, causing domestic production to suffer.
Associate Professor, Dr. Phan Dang Tuat, Chairman of the Vietnam Association of Supporting Industries – former Director of the Institute for Industrial Policy and Strategy Research (Ministry of Industry and Trade), analyzed: HRC steel is a source of raw materials for many different industries, and is a very important upstream production industry. Previously, when Vietnam could not produce hot-rolled steel, it had to depend entirely on imported sources. The participation of foreign-invested enterprises and domestic enterprises such as Hoa Phat and Formosa has brought the Vietnamese steel industry to a new level, becoming more proactive. “Investing in HRC production requires a huge amount of capital because it requires large scale and high technology. This is a good thing and shows that Vietnam’s important industry has developed strongly. Moreover, even other products such as cold-rolled steel, color-coated steel, stainless steel, etc. all have trade defense measures against dumped imports. Therefore, HRC products are the main raw material for producing the above items and need to be subject to trade defense measures,” Mr. Tuat said, emphasizing: The situation of HRC steel being imported into Vietnam in large quantities and showing signs of dumping is increasingly clear. The Ministry of Industry and Trade is launching an anti-dumping investigation and will depend on the investigation results to determine specific tax rates. However, the Government’s stance must always be clearly expressed as protecting domestic production, especially upstream production of the steel industry, which is the backbone of an economy. This not only protects existing production but also contributes to promoting production and increasing investment of domestic and foreign enterprises. Sharing the same view, economist Ngo Tri Long frankly said that steel is a backbone industry, affecting many different economic sectors. Vietnam currently has leading large factories in the region, not only meeting domestic demand but also meeting export standards to developed countries. If we “open the door” to massive steel imports, there will be dumping and unfair competition, which could kill the domestic steel industry. Because despite the huge investment in HRC production, this product is only sold to downstream production units. If it cannot be consumed, businesses cannot reduce prices to sell to the market like other consumer products. Therefore, while waiting for the conclusion of the anti-dumping investigation by the Ministry of Industry and Trade, relevant sectors must strengthen inspection and supervision of HRC steel import activities. Specifically, customs forces must tighten imports in accordance with regulations. At the same time, market management has increased inspections to check whether the sales and consumption of this product with commodity documents are in accordance with regulations or not…
“The fact that hot-rolled steel continues to be imported massively into Vietnam, despite the fact that the authorities are conducting an anti-dumping investigation, is an alarming reality. State management agencies need to intervene more quickly, take measures to protect the legitimate interests of domestic production, ensure jobs for thousands of workers and create a fair competitive environment for businesses,” expert Ngo Tri Long added.
