Escalating trade tensions and rising protectionism have caused a formidable pressure on Vietnamese steel sector.(Photo: VNA) Hanoi (VNA) – Escalating trade tensions and rising protectionismhave caused a formidable pressure on Vietnamese steel sector, according toinsiders.
The Vietnam Steel Association (VSA) has said local steel producers faceddifficulties in the first months of 2019 when prices averaged just 650 USD pertonne, a fall of 12 percent compared to the same time last year, driven bytrade tensions.
Vietnam mainly shipped steel and iron to the markets of the Association ofSoutheast Asian Nation (ASEAN), the US and the European Union. Although exportsto popular partners like Cambodia, Indonesia and Malaysia were kept steady,shipments to two other major outlets - the US and the EU - saw strong declinesin both volume and value.
Some 285,000 tonnes of steel and iron were exported to the US duringJanuary-June, earning the country 223.2 million USD, representing a reductionof 35 percent in volume and 41 percent in value.
Exports to the EU, meanwhile, dropped 30 percent in volume and 41 percent invalue to 204,000 tonnes and 137 million USD.
In the period, Vietnam splashed out some 4.97 billionUSD on steel imports in the period, up 0.8 percent in value as compared to thesame time last year. Of the total imports, steel and iron originating fromChina accounted for 42.4 percent, particularly low-quality products sold at lowprices caused pressure on domestic ones.
VSA Vice President TrinhKhoi Nguyen said abundant steel supply and cheap steel and iron productsoriginating from China have exerted intense pressure on local steel industry.
To this end, the VSA recommended the Government should not approve or grantlicense for new steel projects, especially products with abundant supply suchas cold/hot rolled steel, structural steel and galvanised steel products.Meanwhile, local firms are suggested not to expand investment at this time.
In addition, competent authorities need to raise technical barriers forimported products while policies and measures should be put in place to preventthe shift to Vietnam, including from China, of the investment and production thathas unsuitable technology, consumes much energy and cause environmentalpollution.
“In the context of deep global integration, protectionism measures likeanti-dumping lawsuit, subsidy lawsuit and tax evasion lawsuit should be appliedin a timely way to protect domestic production. Besides, it is a must to abide bythe World Trade Organisation’s regulations,” Nguyen highlighted.
Meanwhile, General Director of Thep Viet Steel Company Do Duy Thai said that asa country which is free for trade, the US still applies anti-dumping measuresto safeguard its manufacturers, and the move has brought success to the nation.
“Therefore, protectionism measures are also important to Vietnam. Although theymay leave negative impact on the country’s economy, the more important questionis that whether Vietnamese steel can meet quality requirements and havecompetitive prices or not,” Thai added./.
VNA
