Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Vietnam Steel Association’s (VSA’s) vice-chairman Trinh Khoi Nguyen expects the country’s steel industry to recover sharply in the short- to medium-term. Steel exports could also rebound amid recovering production volumes.  


The Asian nation’s building materials industry resumed production and consumption towards the end of Q3 2020, with many construction projects speeding towards completion. However, local steel producers have been warned to approach the market cautiously to avoid a possible surplus. 


The association predicted that steel demand in China and Southeast Asia will remain bullish with rising economic activities in the region on China’s return after the Golden Week holidays.  


VSA also attributed the quicker recovery to government support, which includes speeding up the implementation of public investment projects to boost the local industry. These projects will also accelerate the momentum in construction materials and finished steel demand, Nguyen told the media on Oct 26.


The association has urged local steel producers to diversify their products and enhance export to ease the pressure in the domestic market and better compete with the world.


In the first nine months of 2020, Vietnam’s steel production rose to 18.34mn mt from 17.46mn mt in the prior-year period, according to VSA, which expects steel consumption to grow over 7pc by 2021 in ASEAN regions that have large Chinese-invested integrated carbon steel mills.


Hoa phat and Formosa steel perform well

Vietnam’s domestic steelmaker Hoa Phat has so far exported more than 1mn mt of steel billets this year. Of the total exports, 70pc were to China. Moreover, the company invested in technology and product upgradation to match the Chinese policy.  Formosa Ha Tinh Steel also exported more than 1mn mt of steel products in 2020. 


Both companies have said that while the headwind of competing with Chinese firms remains, Vietnamese steel exports have rebounded with an expectation for an increase in the near future.

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