The Vietnam steel association (VSA) has requested its government to support the steel industry to minimise the effect of the outbreak of the Covid-19 (coronavirus).
It is hoping for a cut in interest rates and an extension of credit lines to ensure a stable supply of raw materials.
Major suppliers to Vietnam besides China, are Japan and South Korea.
According to VSA, steel consumption in the country dropped by 35pc and exports have fallen by 20pc due to a halt in construction projects.
Other steel-related products also reported a 30-40pc drop in demand.
The association is in talks with customs and border authorities to find ways to keep supply from China on, and to find alternatives from other countries.
Thái Nguyên Iron and Steel Company (Tisco) said its sales are at 14,000mt for February. The steelmaker said it would only be able to reach 75pc of its quarterly target for Q1 2020.
VTM Steel is likely to halt production in March as its raw material supply has been heavily disrupted.
Its factory is located close to the China border.
South Korea’s Shinhan Investment reported that the impact of Covid-19 on the economy has resulted in a decline in domestic demand in the service sector; disruptions in manufacturing and a slowdown in investments.
Auto–part manufacturers in Daegu and Gyeongbuk provinces faced serious issues of supply disruptions after a surge in confirmed Covid-19 cases.
There was a temporary shutdown at a primary-part outlet, after a worker died from the virus.
The Shinhan report also said that in the transportation and shipbuilding sectors, freight rates bottomed out amid shortage of containers globally.
There has also been a sharp drop in shipbuilding orders, as per Shinhan.
In the machinery sector, Korean sales to China are forecast to drop by 50pc in Q1(Jan-Mar) 2020 from the prior-year quarter.
The country’s domestic construction sector is hit by delays in large volume pre-sales.
Higher USD/KRW rates that reached 1,220-$1 levels late February, from 1,180-$1 levels early February have impacted imports into South Korea.