Illustrative Image (Source: VNA)

Hanoi (VNA) – With growth of up to 22 percent forecast this year and firms with bright prospects, Vietnam’s steel industry has high potential to reach many markets if it overcomes difficulties in trade defence lawsuits and high import volume.

According to the Vietnam Steel Association (VSA), in 2017, the sector faced 30 trade defence lawsuits from other countries, many of which have continued into 2018.

By March 2018, Vietnam had exported 446,000 tonnes steel products for 321 million USD, up 38 percent in volume and 63 percent in value compared to the same period last year.

Vietnamese steel’s quality has met the demand of choosy markets such as the US, Australia and Europe, rising to top position in regional and world markets.

However, in the first months of 2018, Vietnam imported 1.2 million tonnes of steel worth 808 million USD, a drop of 5 percent in volume and an increase of 22 percent in value.

VSA Vice President Nguyen Van Sua held that despite a fall in imports and a rise in exports, the import volume of imported steels remained high.

Sua said the Vietnamese steel industry is still dependent on imports as domestic production process has yet to be synchronised, along with low capacity in producing steel for mechanical manufacturing. Domestic firms are unable to produce many material products such as hot-rolled steel and steel billet, thus making production slow and expensive, he added.

With the recent market recovery and extensive economic integration, especially the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the upcoming singing of the free trade agreement between Vietnam and the EU, the Vietnamese steel sector can expand markets, making the growth target of more than 20 percent feasible.

But the fact is when Vietnam increases exports, import markets will strengthen trade defence measures.

Tran Tuan Duong, General Director of Hoa Phat Group said that Vietnamese firms should maintain the domestic market, while abiding by free trade agreements’ regulations and working with countries when lawsuits occur.

“Market protection solutions are not enough. Businesses themselves should enhance their competitiveness and grasp all opportunities for development,” Duong stressed.

A representative from the Vietnam Steel Corporation asserted that obstacles facing exports mostly come from trade barriers and defence measures from importing countries. The representative underscored the need for more effective market forecast and flexible production.

Despite a lack of capacity and experience, Vietnamese firms can still fight trade defence in the context of integration, the representative said.

Meanwhile, the VSA highlighted the need for cooperation with countries when trade defence problems arise, along with the development of professional teams to deal with investigation and data gathering.-VNA