Steel industry faces difficulties

Businesses "bending the edge"

Deputy Director of the Import-Export Department under the Ministry of Industry and Trade Nguyen Cam Trang said that over the past time, steel enterprises have continuously diversified their export products and made efforts to develop their brands to the world market. Businesses have also actively seized opportunities from free trade agreements (FTAs) such as CPTPP, EVFTA, etc., among the leading industries in taking advantage of tariff preferences.

Thanks to that, despite facing many difficulties due to fluctuations in the world situation and high raw material prices, steel exports were still very positive. In the first 5 months of this year, the whole country exported 4 million tons of iron and steel, worth about 4.1 billion USD. Although the volume decreased by 17.8% over the same period last year, the export turnover increased by 14.8% due to the benefit of steel price, which made the export price increase by 40%. Along with that, the conflict between Russia and Ukraine, which are two major steel export markets to the EU (ranked 2nd and 4th respectively), has disrupted supply to the EU. this chance. Currently, Vietnam's steel products have reached 30 markets.

However, difficulties and challenges still surround businesses. Sales director of Shengli Vietnam Special Steel Co., Ltd. Trinh Tien Anh said that the bank's tightening of credit for real estate caused businesses to suffer quite a lot. High inventories, low demand for construction steel, enterprises were forced to cut production from 3 shifts to 2 shifts per day, even having to temporarily suspend production. With no export orders, this business is "on the brink of loss".

On the other hand, according to Chairman of the Vietnam Steel Association Nghiem Xuan Da, the slow disbursement of public investment also causes the domestic steel demand to decrease, affecting consumption. Besides, the world situation has many challenges and unexpected factors. It is protectionism that continues to increase, especially in Europe and the US; instability and unpredictability of the Chinese steel market; The conflict between Russia and Ukraine pushed up input prices, while product prices continued to fall, causing the steel industry to face many difficulties.

"If in the first quarter, businesses will still benefit from the growth momentum of 2021, but in the second quarter, they will start to suffer", especially from the end of May until now. There have been loss-making businesses in June", Mr. Da informed and said that these difficulties will continue to surround the steel industry in the near future.

Looking forward to a long-term development strategy

Looking at the prospect of the steel industry, the Deputy Director of the Import-Export Department said that although there are still many difficulties, with 15 signed and effective FTAs, opening up great market opportunities for the steel industry. In addition, the system of overseas deals has also actively supported businesses in information connection and trade to boost exports; Accompanying enterprises to effectively respond to trade remedies.

Currently, the world economy is gradually recovering, which will also push up steel demand. Domestically, the economic and social recovery and development program is being implemented, especially promoting disbursement of public investment, which will increase demand, thereby creating momentum for the steel industry to recover.

According to experts, in order to take advantage of opportunities, the steel industry needs to overcome internal difficulties. In which, it is necessary to develop and perfect the production chain, increase added value, and innovate. Enterprises must improve technology and designs, diversify export products, and standardize the supply of raw materials to meet the requirements of the import market. Enterprises also need to actively seek opportunities from FTAs ​​on tariff reduction, meeting rules of origin; strictly comply with regulations of the import market; search for information, adjust production and business to suit the market. Businesses also need cooperation, solidarity and healthy competition.

Chairman of the Vietnam Steel Association Nghiem Xuan Da said that the steel industry mostly imports raw materials for production, from coal, iron ore and scrap steel. Over the past time, the State has opened up, creating conditions for businesses to access raw materials to stabilize production, the import control process has improved in a more favorable direction for businesses.

Particularly for scrap steel products, the industry's demand each year needs about 6.5-7 million tons, of which imports account for 60%. This is one of the materials used for electric furnace technology, which plays a very important role in the production of green steel and circular economy. With that approach, it is necessary to change the perception of the role of scrap steel, consider it as a resource and behave accordingly.

Enterprises want the State to have a long-term development strategy to promote investment, including policies to support investment, human resource development, science and technology. It is known that the Ministry of Industry and Trade has reported to the Government on the proposal to develop a Strategy to develop the steel industry to 2030, with a vision to 2050. This will be an important premise for a long-term policy to promote the development of the steel industry. develop.

People's Deputies