Vietnam Steel Industry Report - 2015

December 14, 2015

This report profiles Vietnam’s steel industry, discussing market trends and outlook through 2014 and into 2015 and beyond. The report also highlights key leading players in the sector including Pomina Steel Corporation (POM), Hoa Sen Group (HSG), Thai Nguyen Iron and Steel JSC (TISCO), and Dai Thien Loc Joint Stock Company (DTL).

The steel industry is one of the core industries of Vietnam which support development of the country, especially infrastructure development. Vietnam’s steel industry saw a revival in 2014 with high demand and improved macroeconomic conditions. Rebound of the frozen real estate market, the main steel consumer in Vietnam, coupled with relaxed monetary and fiscal policies during the year caused the demand to rise.

Vietnam’s apparent steel consumption surged by 22% y/y to 14.4mn tonnes in 2014, making it the second-largest steel consuming country in ASEAN. Vietnam Steel Association (VSA) estimates domestic steel consumption to increase by 1.5-2mn tonnes in 2015, amid higher GDP growth and increases in both export turnover and total investment. Moreover, controlled inflation and interest rate cuts will lead to higher demand from the construction and real estate sectors, while other steel consuming industries such as shipbuilding, automobile manufacturing and mechanical engineering will also see healthy growth.

Potential for long-term expansion of the Vietnamese steel industry is strong, but it still faces some difficulties in terms of the huge cheap steel importation from China and steep decline in selling prices.

Key Points:

• Vietnam’s steel consumption increased significantly by 22% y/y to 14.44mn tonnes in 2014. VSA expects steel consumption to further rise by 1.5-2mn tonnes in 2015.

• In 2015, long products demand is estimated to grow by 10-13%, and steel pipe and galvanised steel to grow higher at 15-18%, thanks to the revitalised realty sector.

• Due to better demand prospects, domestic production of finished steel products in 2014 increased strongly by 19.8% to 12.33mn tonnes. In 2015, overall steel production is expected to rise to 14mn tonnes in line with higher demand growth.

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