Exports May Save Vietnam's Steel Industry

A report from the Vietnam Steel Association (VSA) said that only 50 percent of total steel production was consumed in 2013. The steel industry has gone through another difficult year due to the economic crisis. Nevertheless, the industry can get the fast growing exports on their feet.

In recent years, sales of galvanized steel have generally grown well, but welded steel pipes and cold rolled steel have been declining.
Cold rolled steel is the starting material for consumer and industrial products. Posco Vietnam, a subsidiary of the Posco Group, has been the leading company in the market for the past many years with 84 percent of the country's production and 99 percent of the country's exports.

Steel pipe exports dropped significantly in 2013 following an anti-dumping tax imposed in some markets. There are many steel pipe manufacturers, but SeAH Vietnam, a South Korean subsidiary of SeAH Steel Corp, dominates with 58 percent of the market share. Meanwhile, the Vietnamese company Hoa Sen Group was dominant in galvanized steel, with its export share reaching 47 percent.

Analysts noted that Posco Vietnam and SeAH Vietnam could increase capacity and export volumes because they have a competitive edge and support from foreign holding companies. Posco Vietnam currently has the largest steel plant in Southeast Asia, meaning it has very few competitors in the region.
As for SeAH Vietnam, with advanced technology, it can export products to large markets in the US and Japan, which are always very demanding on quality.

Hoa Sen can enjoy the benefits of a large distribution network covering many provinces and cities. However, most of Vietnam's steel products are of average quality, which makes it very difficult to penetrate the finicky US, Japan and EU markets.