Steel industry grows thanks to exports

The COVID-19 outbreak in many localities has caused a decrease in construction demand, along with the preparation for the rainy season, making domestic steel consumption difficult.

According to the Vietnam Steel Association (VSA), to solve the above difficulties, businesses in the industry have had to find ways to boost exports.

A recent report by VSA said that steel production in July 2021 reached nearly 2.4 million tons, down 6.48% compared to the previous month; steel consumption reached more than 2.1 million tons, equal to June 2021 and up 7.4% over the same period in 2020; of which, steel exports reached 658,207 tons, up 5.96% over the previous month, and up 55% over the same period in July 2020.

Ms. Trang Thu Ha, Chief of Office of VSA, said that due to the impact of the COVID-19 pandemic and seasonal weather factors, the steel industry's production and sales situation faced many difficulties. With the current outbreak of the epidemic in the southern provinces, it is expected that production and consumption in the last months of 2021 will be very difficult.

The VSA representative also said that the increase in consumption output was mainly due to the increase in steel export output of enterprises.

Specifically, according to a report from VSA, the amount of construction steel sold in the first 7 months of 2021 increased by 6.4% over the same period in 2020; of which domestic consumption increased by 3% and exports increased by 25.4%. Construction steel consumption in July will face many difficulties when entering the rainy season. The impact of the COVID-19 epidemic has caused many constructions and civil works to be temporarily postponed, leading to difficulties in the domestic steel consumption market, especially in the southern region.

Hot rolled coil production reached more than 590,000 tons, down slightly by 1.21% compared to June 2021 but up 85.4% over the same period in 2020; consumption reached 559,487 tons, down 6.75% compared to the previous month but up 82.7% over the same period in 2020.

For metal-coated and color-coated steel, in July 2021, consumption reached 428,084 tons, down 6.58% compared to the previous month, but up 18.8% over the same period in 2020; of which exports reached 300,404 tons, up 84.2% over the same period in 2020.

In this field, Hoa Sen Group and Nam Kim are leading in general steel consumption. In the first 7 months of 2021, Hoa Sen sold nearly 1.1 million tons, accounting for 36.7% of the market share. Nam Kim consumed more than 498,000 tons, ranking second with 16.8% of the market share.

Hoa Phat's galvanized steel and steel pipe products also recorded a sharp increase. The leader of Hoa Phat Steel Products Joint Stock Company said that the recent increase in steel pipe and galvanized steel export output was mainly due to the recovery in demand in the US and Europe after the pandemic.

With the domestic steel product consumption situation continuing to face difficulties, businesses in this industry are also looking to export to ensure production capacity.

Ms. Trang Thu Ha said that if in 2020, in the first 6-7 months, many countries were locked down, completely closing the market, and the production chain was stagnant, Vietnam, thanks to its good epidemic prevention, had a strong growth in domestic steel consumption. The strong implementation of construction works and public investment projects has created a premise for the steel industry to develop.

However, with the opposite development of the epidemic this year, in the first months of the year, Vietnam maintained production and in fact, in the first half of 2021, Vietnamese enterprises maintained production compared to other countries. However, in June and July, many provinces and cities implemented social distancing and even had to close many activities, causing domestic market demand to weaken.

"Therefore, we predict that consumption data in the third quarter will not be good. As for the fourth quarter, we have to continue waiting for the results of disease prevention," said Ms. Ha.

The Vietnam Steel Association said that currently, enterprises in the industry are making efforts to produce to serve the domestic and export markets. Enterprises in the South are facing difficulties due to the epidemic, construction stagnation, etc., so recent growth is mainly from exports.

“Hopefully, with the efforts to control the epidemic in Vietnam and other countries around the world, both domestic consumption and steel exports will have better growth at the end of the year,” said Ms. Trang Thu Ha.

Sharing the same view, Mr. Nguyen Van Sua, a steel industry expert, said that in order to maintain production and jobs for workers, many steel enterprises in particular and many industries must find export directions. Because the domestic market is affected by COVID-19 and social distancing, transportation and construction have been stopped.

Recently, Minister of Industry and Trade Nguyen Hong Dien issued Directive No. 10/CT-BCT dated August 23, 2021 on strengthening the management of exports and imports of a number of goods to support domestic production and consumption activities.

Accordingly, the Ministry of Industry and Trade requested the Vietnam Steel Association, Vietnam Steel Corporation and enterprises producing and exporting iron, steel and iron ore to review and consider issues related to input materials, reduce production costs to lower product prices, take measures to increase steel production capacity to meet maximum domestic demand, and limit the export of domestic goods and products that are in high demand.

According to Tin Tuc Newspaper