Vietnam Steel Industry Report - H1, 2012

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Vietnam Steel Industry Report - H1, 2012

2011 saw unpredictable happenings of the European sovereign debt crisis depressing the global economy. In Vietnam, unstable macroeconomic conditions and negative impacts of the global economy caused domestic companies to fall into bad situations and brought many of them into the verge of bankruptcy. Vietnam’s steel industry was affected by the negative effects of the following factors: increase in the cost of raw materials and the exchange rate caused the production cost to go up; tight monetary policy and reduction of public investment caused the demand to drop and selling prices to remain stagnant; and high interest rate and declining stock market led to higher interest expenses.

Vietnam is the third-largest steel consuming country in ASEAN with a demand of 9.70mn tonnes in 2011, down 8.3% year on year. Vietnam Steel Association (VSA) estimates the growth of domestic consumption for steel products to slowdown in 2012 amid restrictive government policies and lower demand from the construction and real estate sectors. This has also contributed to falling steel prices and higher inventories.

Steel businesses had lower profit margins in 2011 as higher interest rates increased financial expenses. Besides, volatile prices and short-term excess of supply exerted pressure on profit growth.

Key Points:

• Vietnam’s steel consumption declined 8.3% year on year to 9.70mn tonnes in 2011. As steel demand shrinks and stock increases, the VSA predicts that the steel industry might fail to raise production by 3% to 4% in 2012.

• Lower consumption, higher inventories and rigid competition from low-priced Chinese imports forced several steel companies to cut their prices and operate below full capacity.

• Steel exports made good progress in 2011 with a significant increase of 52.2% year on year to 2.07mn tonnes, mainly attributed to export promotion schemes and attractive prices.


Table of Contents

1. Industry profile
1.1 Global overview
1.2 ASEAN overview
1.3 Country overview
1.3.1 Market situation
1.3.2 Consumption
1.3.3 Production
1.4 Steel scrap

2. Market trends and outlook
2.1 Imports and exports
2.2 Tax regime
2.3 Foreign investment
2.4 Steel Industry Development Plan 2007–2015
2.5 Prices
2.6 Market outlook

3. Leading players and comparative matrix
3.1 Leading players
3.1.1 Pomina Steel Corporation (POM)
3.1.2 Hoa Sen Group (HSG)
3.1.3 Vietnam Steel Corporation (VNSteel)
3.1.4 Thai Nguyen Iron and Steel Corporation (TISCO)
3.1.5 Dai Thien Loc Joint Stock Company (DTL)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and charts

Table 1: Global apparent steel use (ASU) for finished steel products (2011–2013)
Table 2: Global crude steel production (mn tonnes) (2009–H1/2012)
Table 3: Top 10 steel producing countries (mn tonnes) (2011 vs. 2010)
Table 4: ASEAN apparent steel consumption (metric tonnes) (2011 vs. 2010)
Table 5: ASEAN projected iron and steel production capacity (mn tonnes)
(2010–2014)
Table 6: Vietnam key economic indicators (2005–2011)
Table 7: Vietnam apparent steel consumption of total steel products
(metric tonnes) (2007–2011)
Table 8: Vietnam apparent steel consumption by finished steel products
(metric tonnes) (2007–2011)
Table 9: Vietnam total production of finished steel products (metric tonnes) (2007–2011)
Table 10: Scrap demand and supply (metric tonnes) (2011 vs. 2010)
Table 11: Vietnam imports of iron and steel products (metric tonnes) (2007–2011)
Table 12: Vietnam exports of iron and steel products (metric tonnes) (2007–2011)
Table 13: Vietnam import duty tariffs of selected steel products in 2011
Table 14: Large-scale steel projects in Vietnam during the 2007–2015 period
Table 15: Pomina Steel Corp financial highlights (2010–2012)
Table 16: Hoa Sen Group financial highlights (2010–2012)
Table 17: VNSteel operation highlights in 2011
Table 18: TISCO financial highlights (2010–2012)
Table 19: Dia Thien Loc financial highlights (2010–2012)
Table 20: Leading players’ comparison of key financial ratios

Chart 1: Top 10 steel producing companies in 2011
Chart 2: ASEAN production, import, export and consumption (2006–2011)
Chart 3: Vietnam steel consumption by industries in 2011
Chart 4: Vietnam steel production and consumption (2002–2011)
Chart 5: Vietnam import and export of iron & steel products (2002–2011)
Chart 6: Vietnam import value of iron & steel products (2002–2011)

Number of pages: 29
Release Date: Fri, 05 Oct 2012