Vice-Chairman of the Vietnam Steel Association Nguyen Van Sua said although in recent years, the local steel industry has developed very fast, local importers still had to import a large volume of steel products and semi-finished products every year. Chinese steel products account for 60 per cent of the total steel imports.
Sua said China's yuan devaluation would have both negative and positive effects. Local importers will be able to import steel at reasonably competitive prices. On the other hand, the yuan devaluation will lead to a flood of imported steel products from China such as construction steel, cold-rolled steel and corrugated steel, thus affecting the local market.
Sua said the most effective measure to counter Chinese steel imports was to make Vietnamese steel firms enhance their competitiveness by changing their technology and building trademarks to secure the domestic market. They must know how to lower their production costs so as to increase their price competitiveness, while ensuring product quality and sales policies.
Sharing Sua's view, Pham Chi Cuong, chairman of the Vietnam Foundry and Metallurgy Association, said China was one of the largest steel exporters in the world. Every year, it exports about 60 million to 70 million tonnes of steel products of all kinds. Recently, the Chinese economy showed signs of instability, thus causing a redundant volume of steel. They have sought to take positive measures by enhancing exports and devaluating the Chinese yuan.
Cuong said the devaluation of the yuan would help reduce prices of Chinese steel products and give them the advantage in terms of price. Possibly, in the time to come, Chinese steel would flood Viet Nam markets in large quantities. Meanwhile, measures to prevent trade fraud in steel products are still not effective.
To cope with this situation and to protect local producers, the industry and trade ministry and customs and tax agencies need to work closely to implement the joint decree No 44/2013/TTLT-BCT-BKHCN, tightening the quality of domestic products and imported steel that caused difficulties in consumption.
At the same time, local enterprises are being asked to promote their hot and cold rolled steel products at competitive prices and with good quality standards to compete with cheap Chinese imports. According to statistics from the Viet Nam Steel Association, in the first six months of this year, more than 6.9 million tonnes of steel were imported, posting an import turnover of US$3.82 billion, increasing 37 per cent in volume and 13 per cent in value over the same period last year.
Of this figure, steel imports from China accounted for more than four million tonnes, worth $2.1 billion, and accounted for nearly 60 per cent of the country's total imports. It was followed by Japan and South Korea with 1.2 million tonnes and 830,000 tonnes respectively.