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Vietnam’s steel industry outlook 2022

Vietnam’s steel industry outlook 2022

Friday 18, 02 2022
Vietnam’s steel industry saw impressive growth in 2021, reaching 11.748 billion USD of export turnover for iron and steel of all kinds. Outlook for the steel industry in 2022 is bright when the Government plan on issuing new policies to support steel companies.

Vietnam’s steel industry achieved record exports results in 2021

According to the official announcement of the General Statistics Office, in 2021, Vietnam’s iron and steel export turnover of all kinds reached 11.748 billion USD, up 123.4%, and imports reached 11.5 billion USD, up 42.6% over the same period in 2020. Thus, Vietnam’s steel industry has a trade surplus of 248 million USD.

According to the Ministry of Industry and Trade, while many major export industries of Vietnam lost billions of dollars because of the epidemic, iron and steel remain the industry with the strongest recovery.

 Iron and steel exports

Iron and steel exports increased from the first quarter of 2021 and continued to prosper in the following months. In the first five months of 2021, steel exports reached nearly 4.9 million tons, equivalent to 3.6 billion USD.

By the end of September 2021, Vietnam’s steel export turnover increased to nearly 9.7 million tons, equivalent to nearly 8.7 billion USD. After 11 months, the country's total export of iron and steel of all kinds was 12.2 million tons, worth 10.84 billion USD, up 36.8% in volume and 130.5% in turnover compared to the same period in 2020.

The main steel export markets of Vietnam were ASEAN, with exports reached 3.49 million tons, down 8%; China 2.6 million tons, down 20.1%; EU 1.71 million tons, increased by 7 times; the United States 916 thousand tons, up 5 times over the same period last year.

Prospects for 2022

Many experts and companies believe that 2022 will be a promising year for Vietnam’s steel industry when the pandemic is under control and construction demand recovers strongly, which will make steel consumption continue to increase stronger.

According to the Vietnam Steel Association, the market outlook for the first quarter of 2022 is slowing down due to low domestic demand. Considering the steel consumption market in Vietnam, the demand has positive signals for civil works and infrastructure, especially large public investment.

Vietnam Steel Association

Mr. Tran Tuan Duong, Vice Chairman of Vietnam Steel Association, Vice Chairman of Hoa Phat Group, said that due to the impact of the COVID-19 pandemic that had lasted for the past two years, Vietnam's GDP decreased from 1 -2%. Despite that, the steel industry still had positive growth.

The domestic market has slowed down, but steel enterprises have boosted exports and become net steel exporters, the largest production output in Southeast Asia, with great contributions from the Vietnam Steel Association. Hoa Phat also contributed to this growth.

According to Mr. Nguyen Thanh Trung, Vice Chairman of the Association, Chairman of Ton Dong A Corporation, Vietnam's steel industry aims to develop green steel in the future, meeting European standards when this market will impose emission tax for export products. Vietnam needs to prepare to maintain and increase its export market share.

Ton Dong A will also study and learn so that there are still opportunities to export to this market when imposing environmental-related taxes. Ton Dong A will focus on investing in clean production.

The prospect of Vietnam's steel market in 2022 is forecasted to be better since the Government issued guidance to stabilize, develop production and business activities to flexibly adapt to the COVID-19 pandemic. A representative of the Vietnam Steel Association stated that Resolution 01/NQ-CP, issued on January 9, 2022, will be a support for the steel industry to develop stronger in 2022.

Vietnam’s steel exports

As for Vietnam’s steel exports outlook in 2022, a report by Vietcombank Securities Company (VCBS) has assessed that China gradually reduces export output, causing shortages for partners that regularly import steel from this country. That opens up opportunities for surrounding countries, including Vietnam, to penetrate this market.

As for the European market, safeguard measures such as the application of quotas make it difficult for countries that are exporting largely to Europe in a short time to increase output to meet the sudden increase in demand. That is an opportunity for Vietnamese steel enterprises to export to this market.

In the US, the newly approved infrastructure investment package and the increasing steel demand that will most likely last until half of 2022 will promote Vietnam’s steel manufacturer to export to this market.

India is also a promising steel export market when their government has just announced an infrastructure investment package worth 1.350 billion USD.


Source: vneconomy, vietnamplus

Compiled by VietnamCredit

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