Vietnam steel industry shift to local substrates amid looming US punishing tariffs
In 2019, local supply of hot-rolled steel is projected to meet 40% of domestic demands, which is on track to increase to 70 – 80% following the upcoming operation of the US$2.6-billion Hoa Phat Dung Quat iron and steel production complex.
Vietnam’s steel industry has shifted its focus on using local substrates for production, making it less dependent on foreign input materials amid 400%-plus US tariffs on steel products originated from South Korea and Taiwan, Tuoi Tre News reported.
Illustrative photo.
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As of present, domestic production of hot-rolled steel reached 1.7 million tons, while imported ones were 3.25 million tons, of which South Korea and Taiwan accounted for 15 – 16% of Vietnam’s total imports of the products, and the remaining were from Japan, Belgium and Austria.
To minimize risk and diversify markets, VSA urged local enterprises to prioritize local input materials from Formosa Ha Tinh Steel Corporation (FHS), or importing inputs from countries other than South Korea or Taiwan to avoid US tariffs.
VSA and government agencies are providing information regarding steel production in Vietnam to the US to meet its strict requirements over product origin.
In the first five months of 2019, Vietnam exported 235,000 tons of steel products to the US worth US$185 million, down 37% in quantity and 40% in value year-on-year. Of the total, 80 – 85% of the products were cold-rolled steel and corrosion-resistant steel products.
The amount of steels exported to the US accounted for 8.6% of total Vietnam’s steel exports, significantly lower than the rate of 14% recorded in the same period last year.
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