Who will receive the biggest benefits from the steel production policy?

Hoa Phat Group, VnSteel, Tisco and Viet Y Steel will benefit the most from the Ministry of Industry and Trade’s (MOIT) decision to protect domestic production.

The ministry has decided to impose an official tariff of 23.3% on ingot steel and 15.4% on steel rods as an official safeguard measure against cheap imports to protect domestic production following a warning that domestic products pose a big threat. 

The decision will take effect on August 2, 2016.

According to MOIT, no enterprise hold 30% or more market share, which is considered a dominant position.

There are 14 ingot steel manufacturers in the market whose total output accounts 73% of the market share. 

who will receive the biggest benefits from the steel production policy? hinh 0
Hoa Phat Group is the largest with 25% of the market share. The remaining hundreds of small enterprises account for 27% of the market share.

As for steel rods, there are 21 manufacturers which hold 93% of the market share. Hoa Phat alone holds 20%, while dozens of small enterprises make up 7% of total output.

These figures are based on an investigation taken on the proposal by four steel manufacturers namely Hoa Phat, VnSteel, Tisco and Viet Y which make up 38.6% of domestic ingot steel and 34.2% of steel rod output.

To improve that imports are threatening domestic production, the four enterprises cited the statistics that the ingot steel imports have increased sharply from 466,817 tons in 2012 to 1.502 million tons in 2015, while the figures were 387,470 tons and 1.215 million tons in 2015.

However, MOIT’s decision, while applauded by the four enterprises, has faced strong opposition from other steel manufacturers.

Pomina (POM), Vinausteel, Nasteel Vina, SSE and Vinakyoei have proposed that MOIT not apply the safeguard measure.

They warned that if the import tariff on ingot steel is raised from 9% in late 2015 to 45%, this would lead to a selling price increase, which will place big difficulties on steel manufacturers.

They also pointed out that Hoa Phat, one of the four enterprises that proposed safeguard measures, does not meet difficulties or take losses.

According to HSC Securities, Pomina may bear adverse effects from the decision, while Hoa Phat and Viet Y will be the biggest beneficiaries.

“Earlier this year, some steel mills like POM decided to import ingot steel instead of scrap steel to laminate steel domestically. Pomina would bear adverse effects from the new decision,” HSC said.
Vietnamnet

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