Vietnam, one of the leading steel exporters to China, has been witnessing rising steel exports post COVID-19. The surprising growth of exports to China was fueled by the robust recovery in China’s construction sector.
Vietnam exported 5.96mn mt of iron and steel products in the January to August period up by 36pc from the prior year, according to data provided by the General Department of Customs, Vietnam. Steel exports from Vietnam to China jumped 19-folds to 2.07mn mt from the prior year period. The share of China rose to 35pc during Jan-Aug’2020.
In August, steel exports to China increased by 31pc to 1.16mn mt from a year earlier. China’s customs data shows that steel imports in the first eight months rose 11pc from a year ago to 759.9mn mt.
Chinese economy recovered the first after the COVID-19 outbreak amid heavy financial support given by the Beijing government. Importers booked billets and finished flat products aggressively from the overseas markets in order to take advantage of low import prices than domestic prices. The gap was significantly high as Vietnamese exporters were struggling with sluggish domestic demand and found China as an attractive market.
Hoa Phat top exporter
In the Jan-Aug period, Hoa Phat’s steel sales reached 3.2mn mt including 2.1mn mt of finished steel and 1.1mn mt of steel billet. Finished steel output increased by 20pc from the prior year period. Hoa Phat’s output in the southern region exceeded 500,000mt for the first time in the 8 month period and doubled from the prior year period. The impressive consumption helped Hoa Phat steel increasing its market share to 32pc by the end of August.
China cooling off
In September, Chinese sentiments reversed as buyers lowered import of steel products, including billet and HRC. In the coming days, during the Chinese Golden week imports could completely stop import bookings during October 1-8.
Other major destinations for Vietnamese steel exports from January to August were Thailand, the Philippines and Taiwan recording growth in imports by 81pc, 73pc and 57pc respectively, against the same period the prior year. Steel exports to Indonesia and Malaysia were impacted by 41pc and 19pc during January to August 2020.
|Country||Exports Jan-Aug2020||Exports Jan-Aug2019||% change Y-o-Y|
Quantity in Mn mt
Source – Vietnam customs general