Never before has the steel industry struggled to compete with imported steel as it does now. Without legitimate trade defense measures, many steel businesses will fall.

In 2015, the steel industry witnessed a huge amount of steel imported into the domestic market, with an output of up to 15.098 million tons, an increase of 28.3% over the same period last year, reaching a value of about 7.3 billion USD.

The flood of imported steel at cheap prices is a major threat to domestic businesses. Therefore, in 2016, along with boosting production and minimizing input costs, the major concern of domestic businesses is how to cope with imported goods, in which, many businesses are asking the authorities to protect the domestic steel industry with self-defense measures.

Mr. Nguyen Thanh Trung, General Director of Ton Dong A Joint Stock Company, said that the amount of imported steel in 2015 increased by nearly 30%, with more than 15 million tons. If there are no timely solutions to prevent it, many domestic enterprises will be forced to exhaustion. There needs to be a quick and strong response plan to protect domestic production.

The “big guys” in the steel industry proposed that the Ministry of Industry and Trade impose a temporary self-defense tax of 45% on steel billets and 33% on long steel products made from imported steel billets
It should be added that the amount of iron and steel of all kinds imported into Vietnam in 2015 mainly originated from China, Japan, Korea, Taiwan, of which iron and steel from China accounted for more than 50% with cheap prices.

Faced with the increasing influx of imported steel, in late December 2015, four “big guys” in the steel industry, namely Hoa Phat Steel JSC, Southern Steel Company Limited, Thai Nguyen Iron and Steel JSC and Viet Y Steel JSC, submitted a petition to the Competition Management Department (Ministry of Industry and Trade) requesting the application of safeguard measures on steel billets and long steel products imported into Vietnam.

According to these enterprises, there has been a sudden and unusual increase in the import of goods subject to investigation in recent times. Specifically, the amount of imported steel billets increased from nearly 600,000 tons in 2014 to 1.5 million tons in 2015. Imported long steel from nearly 830,000 tons in 2014 also increased to more than 1.2 million tons in 2015. This has caused serious damage to the steel industry, reducing capacity, market share, profits, and causing job losses.

It is known that for steel billet products, these 4 enterprises currently account for nearly 40% of the total domestic production output. For long steel products, these companies account for more than 34% of the total production output. The investigation period to determine damages is calculated from January 1, 2012 to September 30, 2015.

Also according to information in the dossier, the domestic sales volume of steel billet products of the domestic production industry increased by 5-10% in 2015, while the volume of imported goods increased by 150-160% in the same period. The four enterprises that submitted the application argued that this had seriously reduced the market share of the domestic steel billet manufacturing industry, affecting business performance and profits, etc.

Therefore, the plaintiff requested the Ministry of Industry and Trade to temporarily impose a safeguard tax of 45% on steel billets and 33% on long steel products manufactured from imported steel billets, regardless of the exporting country, for a period of 200 days to remove difficulties for the plaintiff and ensure the competitiveness of domestically produced steel billets and long steel products.

After reviewing the application, the Ministry of Industry and Trade confirmed that the application was complete and valid according to the provisions of law. The Minister of Industry and Trade signed Decision No. 14296/QD-BCT on the investigation and application of safeguard measures on steel billets and long steel products imported into Vietnam.

According to the Vietnam Steel Association (VSA), the scale of China’s steel industry is too large, so it is forced to consume by boosting exports, and this phenomenon not only causes difficulties for Vietnam but also for the EU…

Based on the world steel supply and demand situation, VSA believes that construction steel prices in 2016 will hardly increase, because supply is in excess of demand and countries with large steel production like China are still implementing policies to boost exports. VSA also recommends that domestic steel enterprises cooperate closely to increase competitiveness and protect domestic production from the encroachment of imported goods.