Vietnam’s GDP growth rate was around 2.9% in 2020. With the spread of COVID-19 in 2020, the annual GDP growth rate of 2.9% is already a good number in the world. The Vietnamese economy has been growing rapidly for many years. However, manufacturing wages are still at low levels, below 50% in China and well below those in developed countries in 2020.
According to CRI analysis, the demand for steel rises as the standard of living of residents rises. Sectors such as construction, automobiles, and household appliances also increase. The rapidly growing demand for steel has led many steel companies to build new steel capacities in Vietnam. With the COVID-19 epidemic in Vietnam tackled effectively, the steel industry in Vietnam will not be badly affected in 2020.
Overall, the Vietnamese steel industry continues to grow and, according to the CRI analysis, homemade steel cannot meet the needs of the domestic market. In 2020, the production volume of crude steel in Vietnam reached 30.67 million tons, which corresponds to an annual growth rate of 41.3% between 2013 and 2020.
According to CRI analysis, many companies have invested in the Vietnamese steel industry in recent years due to the enormous potential of the steel market in Vietnam and even in Southeast Asia. The case is Formosa Ha Tinh Steel Corporation (FHS), a joint venture of Formosa Plastic Group, China Steel Corporation, and Japan’s JFE Holdings, which is investing more than $ 10 billion in phase one due to the rapid increase in production capacity. In the steel industry, the supply of some types of steel in Vietnam has exceeded demand in recent years, including concrete, iron, or steel for construction, cold-rolled steel coil products, etc. The Vietnamese government is actively attracting foreign investors to establish positions in the country.
According to CRI analysis, there are more than 100 companies in the Vietnamese steel industry, the largest of which are Hoa Phat Steel. Hoa Sen Steel, Vietnam Steel Corporation, SMC Steel Company Limited, VSC-POSCO STEEL CORPORATION (VPS), Formosa Ha Tinh Steel Corporation (FHS), etc. The Vietnamese government has not formulated any national guidelines for foreign investment in the steel industry. However, many industrial parks in Vietnam have set up steel companies with tax and other preferential policies. and the construction industry is developing rapidly, the demand for steel will continue to increase. It is estimated that Vietnam’s roads, airports and other infrastructures, housing construction, automobiles, home appliances, and other industries will show a high growth rate in the period 2021-2025.
Production capacity (no more than 1 million tons per year) with obsolete equipment Foreign-funded companies have seen great market prospects for investments in the Vietnamese steel industry, especially for building one-stop-shop businesses from crude steel production to processing various types these steel companies are trading in Vietnam, on the other hand, they can export products to the Southeast Asian market with a total population of nearly 700 million and even to the Asia-Pacific market.
The Vietnamese steel market is one of the fastest-growing markets in the world from 2021 to 2025. The volume of crude steel is expected to exceed 15%. Vietnam will become a net exporter of steel by 2024.
REFERENCE: Research Report on Vietnam Steel Industry 2021-2025
Topics covered in the report:
-The impact of COVID-19 on Vietnam’s Steel Industry
-Development Environment of Vietnam Steel Industry
-Supply and Demand of Vietnam Steel Industry, 2013-2020
-Analysis on Import and Export of Steel in Vietnam, 2013-2020
-Major Steel Manufacturers in Vietnam, 2019-2021
-Advantages and disadvantages of the development of Vietnam’s cement industry
-Prospect of Vietnam Steel Market, 2021-2025