VN steel sector eyes 12% growth but warns of challenges

According to the VSA, steel consumption depends on the country’s gross domestic product growth. 
With expected GDP growth of 6.2 per cent this year, and the operation of 10 steel projects in 2017, the sector’s growth is expected to further expand, the VSA said. 
However, it warned of challenges ahead as cheap steel from China would continue to flood the domestic |market. 
Vietnam also has to meet strict technical standards when it exports steel. 
To cope with difficulties, the country will have to apply trade protection measures and technical barriers to restrict steel imports, the association said. 
The VSA has filed petitions to the government, demanding anti-dumping measures be imposed on several steel imports.
The VSA has sent a document to the Ministry of Industry and Trade (MoIT) to propose some changes in the draft zoning plan for Vietnam’s steel sector until 2025 with a vision towards 2035.
According, the association suggested that the ministry propose to the government to stop managing the industry by planning.
Regarding the current practices, it said, a steel project could not be approved if it was not named in the master plan for the industry.
VSA vice chairman Nguyen Van Sua said that economic sectors including steel should not be managed by planning.
Instead, the zoning plan for Vietnam’s steel sector should be used as a reference for businesses before deciding their investment, he said.
According to the Law on Planning which has been discussed in the National Assembly since September, 21 sectors would need planning at national level as they relate to maritime resources and large-scale infrastructure. But most opinions |are against planning for the steel industry, yet the ministry has still drafted planning and gathered |opinions.
Besides, the issuance of investment certificates should be done with the agreement of relevant ministries, not just the MoIT, the association said.
The association noted that the MoIT’s draft had shortcomings as it did not provide development targets for hot-rolled and high-quality steel. Vietnam imports 100 per cent of these products.
The ministry has put the expansion of the Thแi Nguy๊n Iron and Steel Corporation phase 2 in the draft-zoning plan despite losses.
The VSA proposed that the MoIT resolve issues with the projects which have not started their construction or are unfeasible between 2017 and 2025.
At a recent Q&A session of the National Assembly, the Minister of Industry and Trade said the country would not implement industrial projects that harmed the environment and that no groups could influence the project approval process.
The ministry wants sustainable growth for industrial sectors and to use natural resources efficiently. 
It reiterated that Vietnam needed more steel projects, because by 2020 the country will have to spend US$15 billion a year on imported steel.
VSA figures revealed that last year Vietnam imported more than 14 million tonnes of steel. It is estimated that this year the country will import about 17.5 million tonnes.