The Vietnam National Coal – Mineral Industries Group (Vinacomin) on May 7 delivered 23,000 tonnes of coal to South Africa.

This is the first time that the group has exported the product to the South African market this year.

Vinacomin is planning to export more than 60,000 tonnes of coal from now to the end of May. The export is expected to help the group increase sales and ensure stable exploitation and delivery of coal from mines in the Cam Pha area, the northern province of Quang Ninh.

Petrovietnam seeks measures to restart Long Phu 1 Thermal power project

The Vietnam Oil and Gas Group (Petrovietnam) and contractors are discussing measures to restart Long Phu 1 thermal power project that has been postponed since 2019.

At a meeting with the project management board and contractors last weekend, Petrovietnam General Director Le Manh Hung, Petrovietnam Deputy General Director Pham Tien Dung, other managers of the group and contractors, including the Petrovietnam Technical Services Corporation (PTSC) and the Petrovietnam Construction Joint Stock Corporation (PetroCons), discussed the deadline to complet the project, total new investment amount, the best options to carry out and implementation plans.

Petrovietnam General Director Le Manh Hung asked the Long Phu 1 Project Management Board to coordinate with relevant departments to soon identify options and implementation plans.

Hung also requested the Long Phu 1 Project Management Board to establish working groups to update the total project estimate, review the legal status of contracts, and re-evaluate the capitalisation value of the project.

He asked PTSC to continue to support the Long Phu 1 Project Management Board to better evaluate, classify and maintain machinery and equipment on the construction site, making it ready to restart the project.

According to the Long Phu 1 Project Management Board, since Russian constructor Power Machines Company withdrew from the project due to the US’s sanction on January 26, 2018, the project's completed workload was still kept at over 70%. Meanwhile, the company announced the termination of its EPC contract on February 22, 2019.

At a meeting late last year, the Project Management Board also said that it was coordinating with Petrovietnam and the legal consultant to prepare and complete procedures to submit to the international arbitration council at the Singapore International Arbitration Center (SIAC).

The magement board also completed the plan to restart the project. Accordingly, the project is expected to be completed by 2026 and the board prepared for the selection of a new EPC contractor.

The construction of the Long Phu 1 Thermal Power Plant in Long Phu district, Soc Trang province, started in early 2011. The project consists of two turbines with a total installed capacity of 1,200 MW. Once put into operation, the plant will contribute to the national grid with about 7.8 billion kWh per year.

Indian travel companies seek investment opportunities in Ninh Thuan

Representatives of Indian travel companies are joining a Famtrip delegation to Ninh Thuan to seek tourism cooperation opportunities in the south-central coastal province.

The delegation had a meeting with the provincial People’s Committee and the Indian Consulate General in Ho Chi Minh City on May 8.

The event offered a good chance for Ninh Thuan to promote the image of the province and its people, unique culture, landscapes and typical tourism products; and share information towards setting up business cooperation with Indian tourism firms.

Addressing the event, Vice Director of the provincial Department of Culture, Sports and Tourism Pham Thi Thanh Huong briefed on the province's potential and strengths, as well as orientations for tourism development of Ninh Thuan, saying that the province always strives to turn tourism into a spearhead economic sector in the coming years.

Ninh Thuan’s tourism industry has recorded new and breakthrough development steps in recent years, with many types of attractive products and services, and tourist accommodation establishments being developed and invested, she said.

To create motivation for promoting socio-economic development, Ninh Thuan is giving priority to developing resort and sea tourism; culture and high-tech agriculture tourism; ecotourism; adventure and entertainment tourism; healthcare tourism; community tourism and culinary tourism, and business travel.

Madan Mohan Sethi, Consul General of India in HCM City, spoke highly of the potential, advantages, as well as tourism development orientation of Ninh Thuan, saying that with the above-mentioned conditions, this is a golden opportunity for Indian tourism businesses to invest in developing tourism services in the province.

The Indian Consulate General will act as a bridge to provide relevant information for Indian tourism businesses, he stressed.

Vice Chairman of the provincial People’s Committee Nguyen Long Bien said the province hopes that the Consulate General will continue to support and create conditions for Indian investors and businesses to invest in tourism and other fields in Ninh Thuan.

The local authorities are committed to creating the most favourable conditions for Indian investors and tourism businesses in connecting, collecting information, carrying out investment registration procedures; and giving them investment incentives to ensure their interests.

Ninh Thuan aims to welcome 3.5 million visitors and earn 2.9 trillion (over 123.6 million USD) in revenue by 2025, accounting for 13% of the province’s GRDP, and creating jobs for 15% of its workforce.

Tourism is expected to become a breakthrough economic sector of the province by 2030, and a particularly attractive tourist destination with high competitiveness compared to the region and the country.

Ca Mau Gas-Power-Fertiliser Complex hits targets at full capacity

All the production plants in the Ca Mau Gas-Power-Fertiliser Complex, with investment from the PetroVietnam Camau Fertiliser Joint Stock Company (PVCFC), operated safely at full capacity over the first four months of 2023.

The plant hit its targets on production, consumption and budget payment set by the PetroVietnam GAS Corporation JSC and the Petrovietnam Power Corporation (PV Power).

The information was released by General Director of the Vietnam Oil and Gas Group (Petrovietnam) Le Manh Hung at a recent working session with representatives of units having plants in the complex.

Hung urged the units to continue focusing on safe production operation; and investment, business and market development in the coming time to fulfill the goals in 2023.

The units should closely coordinate in production, business, and periodic maintenance and repair, and share information to find long-term development solutions, he said.

Representatives from the units suggested that Petrovietnam should have proposals to solve problems related to gas supply and prices, and value-added tax policy for fertiliser products.

Hung assigned Petrovietnam’s Economic and Investment Department to coordinate with relevant departments and PV Power, PV GAS, and PVCFC to focus on building a database, thus setting out an overall and long-term strategy for the complex as soon as possible.

He asked the units to strengthen digital transformation, deploy value chain linkage models, keep close watch on market developments, and strive to complete the set management objectives to ensure the project growth goal for Petrovietnam.

HCM City to host Vietnam Medi-Pharm Expo

As many as 400 domestic and foreign enterprises will join the 21st international medical, hospital and pharmaceutical exhibition (Vietnam Medi-pharm Expo),  slated to be held in Ho Chi Minh City from August 3-5.

The expo is set to attract about 400 exhibitors from 18 countries and territories including India, Poland, Taiwan (China), Germany, the Republic of Korea, Malaysia, US, Russia, Japan, Singapore, Spain, Turkey, mainland China, Australia and Italy.

The exhibition will showcase healthcare products, food supplements, medical equipment, hospital services, and furniture in 450 booths, according to the event’s organisers.

The Pharmaceuticals Export Promotion Council of India (Pharmexcil) will lead a delegation of 40 pharmaceutical enterprises to display products and explore partners at the exhibition.

The expo will offer organisations and businesses opportunities to enhance the exchange of experiences, promote their products, seize investment opportunities, and promote cooperation to improve efficiency in production and business, the organisers said.

A series of seminars and B2B business matching will be held on the sideline of the event, they said.

The expo is organised by Vinexad JSC in collaboration with specialised pharmaceuticals and medical equipment associations.

Vietnamese, Japanese cities look to expand collaboration in agriculture, tourism

The People’s Committee of the Mekong Delta city of Can Tho and the Administration of Nasushiobara city of Japan on May 8 signed a Memorandum of Understanding (MoU) in the fields of agriculture and tourism.

Addressing the signing ceremony, Tran Viet Truong, Chairman of the municipal People’s Committee, said the signing of the agreement is expected to bring practical effects to the people and businesses of the two cities, contributing to building good relations and friendship between Vietnam and Japan.

To strengthen the cooperation between Can Tho and Nasushiobara in the coming time, Truong suggested continuing to create favourable conditions for businesses of the two sides to exchange and explore the demand, advantages, and actual capacity of each side, thereby promoting effective collaboration in the fields of agriculture and tourism, creating a premise for trade and investment cooperation.

Watanabe Michitaro, Mayor of Nasushiobara city, expressed his pleasure when the MoU between the two cities was successfully signed, especially in 2023 on the occasion of the 50th anniversary of Vietnam-Japan diplomatic ties.

The Mayor said he hopes it can pave the way for concrete cooperation work between the two cities in the future, adding that they can develop their collaboration in other fields as well.

Can Tho and Nasushiobara began cooperating in January 2020. Up to now, the relationship between the two localities has continuously strengthened with many friendship activities. The senior leaders of the two localities have paid working visits to each side, thereby defining the cities have great potential for cooperation, especially in the fields of agriculture and tourism. The signing of MoU is essential so that the two sides can promote cooperation and complement each other in line with development needs.

Vinh Long looks to expand collaboration with Niigata prefecture of Japan

The Mekong Delta province of Vinh Long wants to expand cooperation with Japanese partners, especially with Niigata prefecture, said Lu Quang Ngoi, Chairman of the provincial People’s Committee on May 8.

At a reception for a Niigata delegation led by Kanai Kenichi, director of the prefecture's Department of Labour and Industry, the provincial leader said that Niigata boasts strengths in agriculture, being one of the largest granaries in Japan. The prefecture is also one of the localities with high demand for labour, mainly in the fields of agriculture and seafood processing.

Located in the centre of the Mekong Delta, Vinh Long has great potential for agriculture production, aquatic products processing and tourism development. The province is home to 10,000-12,000ha of sweet potato with a total annual output of about 235,000 tonnes. It also produces nearly 1 million tonnes of unhusked rice a year.

Each year, more than 1,000 labourers in the locality are sent to work in Japan each year, accounting for 85% of the total number of local workers working abroad under fixed term contracts, the official noted.

"Vinh Long province wishes to boost cooperation with Niigata prefecture in some areas including training high quality human resources, sending trained workers to the Japanese locality; trade investment promotion; applying high technology in agricultural production as well as cultural and tourism exchanges to tighten the relations at local level and enhance understanding between the people of the two localities," Ngoi said.

For his part, Kenichi told the host that Niigata is the leading locality in terms of rice cultivation area and output with a total agricultural production value of 225.4 billion JPY (1.6 billion USD). The prefecture also has a number of leading manufacturing industries in the country.

The delegation will conduct more surveys to promote cooperation and exchanges with Vinh Long in many fields in the coming time, he said.

Bank deposit interest rates keep falling

Banks have been steadily cutting deposit interest rates, which have reached around 8%, a move aimed at reducing lending rates to support businesses.

The highest listed rate for 12-month deposits is around 8% per year.

Larger private banks have cut the 12-month rate to below 8%. SHB, Techcombank, ACB, and MB pay between 7.3% and 7.9%.

The four State-owned banks – Agribank, BIDV, Vietcombank, and Vietinbank – continue to pay the lowest rates in the market, around 6% for six to less than 12 months and 7.2% for 12 months.

Smaller banks have also reduced rates significantly since last month.

For 12 months, Bac A Bank’s rate has fallen from 8.6% to 8.3%; KienlongBank’s from 8.5% to 8.2%; and SaigonBank’s from 8.3% to 8%.

Deposit interest rates have been creeping downwards, especially after the central bank cut the operating interest rates on March 15 and April 3.

At the end of last year, almost all private banks offered more than 9% for 12-month deposits. Smaller banks paid 10% or more.

The high deposit interest rates pushed up lending rates to 13-14%, putting huge pressure on businesses.

According to VNDirect Securities Company, deposit interest rates will continue to fall until the end of 2023, tracking sluggish credit demand due to a slump in economic growth and the property market.

It also said the Government would increase public spending this year to pump more money into the economy.

It expected the 12-month deposit rate to fall to around 7% by the end of 2023.

The high lending interest rates are burdening businesses amid declining export orders and weak domestic demand.

But the falling deposit interest rates have raised hopes of a drop in lending rates.

At a meeting last week, central bank deputy governor Dao Minh Tu urged banks to cut operating costs and improve administrative procedures to reduce lending interest rates.

Vietcombank reduced lending rates by 0.5 percentage points last week.

Earlier, Agribank cut them by 1.5 percentage points for dong loans and 1 percentage point for dollar loans.

According to the central bank, deposit interest rates have decreased by 1-1.2 percentage points since the end of last year and loan interest rates by 0.5-0.65 percentage points.

In a related move, the central bank has instructed commercial banks to roll over debts and keep debt classifications unchanged.

Sea and island tourism a ‘gold mine’ that needs to be tapped fully

Sea and island tourism has long been a magnet, attracting over 70% of the total foreign tourists to Vietnam.

However, the country has yet to fully tap its potential and advantages to develop this type of tourism in a better way.

Vietnam boasts a coastline of 3,260km, with nearly 400 beaches and over 3,000 islands, stretching from the North to the South. Many of them have gained international titles. For example, Ha Long Bay in the northern province of Quang Ninh is among the seven New Wonders of the World. My Khe Beach in the central city of Da Nang has been named among the 10 best beaches in Asia, as voted on by readers of renowned travel website TripAdvisor.

Meanwhile, US-based Time Magazine voted Phu Quoc as one of the top 100 most amazing islands in the world in 2021. In November 2022, surpassing six world-famous islands, Phu Quoc was honoured by the World Travel Awards as "The island with the world's top captivating natural beauty”.

Pham Hong Long, head of the Faculty of Tourism Studies of the University of Social Sciences and Humanities (Vietnam National University, Hanoi), said it is not by chance that Vietnam's Tourism Development Strategy to 2025, with a vision to 2030, orientates that sea and island tourism is one of the four main types of Vietnam's tourism.

Meanwhile, the Strategy for Sustainable Development of Vietnam's Sea-based Economy to 2030, with a vision to 2045, defines that tourism and marine services are the top priority in six breakthroughs of the marine economy by 2030.

Therefore, it is a ‘gold mine’ of the green economy, said Long, stressing the need for more attention from the State to help it develop further.

However, by now, Vietnam has exploited only 20% of the beaches across the nation, mostly renowned ones such as Ha Long Bay, Sam Son, Cua Lo, Lang Co, Da Nang, Nha Trang, Mui Ne, and Phu Quoc.

This makes these beaches overloaded in the peak season, leading to many consequences in terms of business culture, environmental degradation, conflicts over the use of marine resources, and price inflation.

In addition, human resources in the post-pandemic period are few in quantity and weak in skills. In particular, Vietnam does not have high-class products that help increase revenue and boost sustainable development.

Pham Ha, CEO and Founder of Lux Group - Asia’s leading luxury travel and tourism company, stated that current policies have not really created favourable conditions for investors to develop tourism services at sea and islands.

According to him, when investing in operating Emperor Cruise in Nha Trang, it took his company a lot of time and money to get 18 types of licenses from many different management agencies. Applying for licenses to invest in yachts in Phu Quoc is also facing similar difficulties, he added.

Therefore, he stressed the need to have a strategy and plan to exploit sea and island tourism more harmoniously and sustainably.

Green funds expose the need for fund-managed institution

The growing availability of green funds in the world has exposed the need for a professional institution in Viet Nam to take charge of the green money granted to the country.

Pham Xuan Hoe, former head of the Banking Strategy Institute, said that green funds to Viet Nam would be more abundant in the next few years on the back of the Just Energy Transition Partnership launched in December 2022.

At least US$15.5 billion initiated by the partnership will come in the form of preferential loans for three to five years to support the country's energy transition. The EU and the UK also got in on the act with committed assistance of $7.8 billion.

Given the growing availability of green funds, the former head called for a professional institution to manage the green money delivered to the country. Such an institution, he believed, will act as an intermediary that would improve domestic firms' access to green capital.

In the long term, the former head urged the establishment of an up-to-international-standards financial taxonomy that works in line with other financial systems, including taxation and carbon credit.

Professor Vu Sy Cuong at the Academy of Finance opined that the transition to green growth in Viet Nam requires vast investments. Between now and 2040, the country would need an annual amount of finance equivalent to 6.8 per cent of the GDP to improve its resilience against climate change.

International institutions and banks are willing to dig deep into their pockets to fund the country's effort on 'going green'. However, the availability of green funds is one story, and the absorbability of the funds is another.

The absence of a climate bond taxonomy and a legal framework for the bond in Viet Nam has stymied those who want to finance green projects in the country. On top of that, the low awareness of ESG (Environmental, Social, and Governance) among firms has made scores of firms slip through the cracks.

To unlock the full potential of green funds, the professor called for establishing a carbon credit market and granting financial assistance to firms cutting back on stranded fossil-fueled assets.

According to DARA International, Viet Nam would incur an annual cost of $15 billion (5.0 per cent of the GDP) in the next years owing to climate change. If the country fails to take early action, the cost could soar to 11 per cent of the GDP by 2030. 

VinFast cooperates with I-Car® for auto collision repair, training

VinFast announced on May 3 a partnership with I-CAR®, the Inter-Industry Conference on Auto Collision Repair, to improve the capability of the VinFast Certified Collision Network (VCCN) and the professional skills of its technicians to meet international standards.

Under the partnership, I-CAR will provide the VCCN with the Professional Development Program (PDP™), an accredited training roadmap on collision repair. The program offers a recognised path for this training, providing repair technicians with the knowledge and skills needed to perform complete, safe, and quality repairs.

Through PDP™, the VCCN will be able to maintain their I-CAR Gold Class™ status and I-CAR Welding Training & Certifications. This is a guarantee that certified collision centers will have clear criteria for vehicle repair quality that meet international standards.

I-CAR is a non-profit organisation focused on improving the quality and safety of auto collision repair for the ultimate benefit of both the industry and the consumer. As one of the industry education leaders, I-CAR has now partnered with more than 20 OEMs around the world, including established legacy manufacturers to newer and EV-focused brands. 

HCMC removes obstacles in fire prevention, fighting for karaoke facilities

An official letter to guide some solutions on overcoming obstacles in fire prevention and fighting for karaoke facilities, bars and discotheques in the city has just been promulgated.
 
Accordingly, the Fire Prevention and Fighting and Rescue Police Division (PC07) under the Ho Chi Minh City Public Security Department has just promulgated the letter.

Particularly, karaoke facilities, bars and discotheques in the city are exploited that have to meet requirements on fire safety in accordance with the Decree No.136 and ensure the obligated regulations on fire prevention and fighting.

In case of the facilities fail the requirements noted in Decree No.136 related to the renovation, they have to apply the National Technical Regulation 06:2022/BXD. The facilities have to repair and overcome the issues and violations on fire prevention and fighting to meet the design, standards and regulations at the time of approval on fire prevention and fighting.

The business facilities which are not under subjects of appraisal on fire prevention and fighting in accordance with the Decree No.35/2003, Decree No.46/2012, Decree No.79/2014 or those which have been approved for the design, acceptance works on fire prevention and fighting but they have not been the subjects under the appraisal process following the Decree No.136, the owners of the facilities have to overcome the issues promptly and do not require to approve the design and acceptance works on fire prevention and fighting.

However, as for the facilities that are required to halt the operation to repair, overcome the issues and violations on fire prevention and fighting or temporarily suspend the operation have to perform the regulations and requirements.

Tan Phu - Lien Khuong Expressway to start construction on September 2

Lam Dong Province hurries to complete the coordination procedures between relevant localities and units to soon start construction of the Tan Phu - Lien Khuong Expressway on September 2.

Chief of Office of Lam Dong Provincial People's Committee Ngo Van Ninh yesterday said that Lam Dong Province will carry out landmark planting for the entire expressway of Tan Phu- Bao Loc, a section through Lam Dong Province and a section of Bao Loc - Lien Khuong.

According to the Lam Dong Provincial People's Committee, the locality completed the first report of the feasibility study for the 66-kilometer Tan Phu- Bao Loc expressway section having a total investment of VND17.2 trillion (US$735 million), including VND900 billion (US$38 million) being allocated in 2023.

The 74-kilometer Bao Loc - Lien Khuong expressway section has a total investment of VND19.5 trillion (nearly US$835 million), including VND506 billion (US$21.6 million) being allocated for the implementation this year.

MoT proposes using VND6.81T in State capital to repurchase five BOT projects

The MoT has proposed a solution that involves allocating VND10.34 trillion of State capital to terminate contracts for five projects and provide additional funding for three others.
 
The Deo Ca Tunnel BOT project requires an additional VND2.28 trillion of State capital.

The Ministry of Transport (MoT) has recently presented a report to the Government regarding the challenges and shortcomings encountered in several traffic BOT (Build-Operate-Transfer) projects. It has proposed a solution that involves allocating VND10.34 trillion of State capital to terminate contracts for five projects and provide additional funding for three others.

To address the issue, the Ministry of Transport has identified five projects that require a total of VND6.81 trillion in State capital to compensate investors and terminate contracts before the deadline.

These projects include the Binh Loi Bridge BOT project, which requires VND571 billion due to the inability to collect tolls when the waterway port is not invested as planned.

The BOT project of the Western Belt Road in Thanh Hoa City, which is a part of the National Highway No.1 BOT project and bypasses Thanh Hoa City, requires VND892 billion due to the unfeasible location of the toll station.

The upgrade and renovation project of National Highway No.91 in Can Tho City requires VND1.75 trillion because its T2 toll station is not allowed to collect fees.

The Thai Nguyen-Cho Moi Road BOT project and the renovation project of National Highway No.3 at the km75-100 section require VND2.85 trillion because only one of the two toll stations can operate.

Additionally, the Ho Chi Minh Road BOT project from km1,738+148 to km1,763+610 requires an allocation of VND745 billion due to the unfeasible financial plan when vehicles switch to the free bypass route of Buon Ho Town.

The Ministry of Transport has suggested using VND3.53 trillion of State capital to supplement three projects and extend their toll collection periods.

The Deo Ca Tunnel BOT project requires an additional VND2.28 trillion of State capital to replace the free toll collection on the La Son-Tuy Loan route. This route will collect tolls for the State budget. This extension will prolong the toll collection period of the project by approximately 28 years and four months, as the original toll collection contract was for 27 years and 11 months, contingent on toll collection on the La Son-Tuy Loan route.

The Van Lang Bridge BOT project requires an additional VND533 billion in State capital as its revenue has only reached 28 percent. To address this issue, the investor has agreed to reduce their profit margin by 50 percent, resulting in a reduction of VND402 billion over 22 years. This extension will increase the payback period from 19 years and ten months to 22 years.

Similarly, the Thai Ha Bridge BOT project crossing the Red River needs an additional VND717 billion in State capital as its revenue has only reached 19 percent because vehicles are choosing the toll-free Hung Ha Bridge instead. The investor has agreed to reduce their profit margin by 50 percent, resulting in a reduction of about VND225 billion over 35 years. This extension will increase the toll collection period from 16 years and seven months to 35 years.

In September 2022, the Ministry of Transport proposed allocating over VND13 trillion to "write off" eight BOT projects facing difficulties. The Ministry of Planning and Investment has proposed to the Prime Minister that the Ministry of Transport be fully responsible for information and data, reviewing contract content and legal basis for proposed contract termination, and addressing existing issues that led to the early termination of the project contract.

Hopes build that lower steel prices can boost consumption

Consumption continues to be a challenge for Vietnam’s steel industry, with manufacturers struggling to ensure output.

The price of steel is decreasing on both the international and domestic markets. According to the Shanghai Futures Exchange, global steel prices have fallen continuously since March 30, from $610 to $578 per tonne on April 18. According to SteelOnline.vn, the price of Pomina Steel coil dropped by $27.2 to $720 per tonne, and the price of rebar fell by $30.6 to $717.9 per tonne. Domestic prices have also dropped in a similar fashion.

SteelOrbis, as of 10 days ago, noted that “influence from the Chinese market” also had an impact on billet prices in Southeast Asia. The price per tonne of Chinese-origin billet has decreased by $15 since the beginning of April and by $10 since the end of last week. “The ongoing slump in China compounds the price uncertainty in Southeast Asia,” the website remarked.

“The lack of demand will persist for at least two months longer,” Duong Duc Quang, deputy general director of the Mercantile Exchange of Vietnam (MXV), told VIR.

According to Quang, approximately 60 per cent of steel is used in civil construction. According to him, this will continue to be a “substantial barrier to purchasing power”, so consumption growth will be limited in the short term, at least through the second quarter.

Therefore, Vietnam’s steel exports also encounter obstacles. According to information provided by the World Steel Association (WSA), global primary steel production in February was 1 per cent less than in February 2022. March data has not yet been released.

According to the MXV, the price of input materials on the global market, such as steel billet and particularly iron ore, which account for approximately 36 per cent of the cost of steel products, has substantially chilled and continues to fall.

The drop in the cost of steel and billets has prompted production companies to anticipate a slight increase in consumption, although not a total reversal of fortunes. According to Vu The Duyet, an analyst at Vietcombank Securities (VCBS), consumption volume in 2023 will remain “dismal”.

According to VCBS, total construction steel consumption will decline by roughly 4 per cent in 2023 before rebounding by 7 per cent in 2024, when the recovery of the building sector will be the primary growth driver.

In addition, export output is anticipated to remain low given that the economies of the United States, the EU, and China have all shown signs of weakness.

The third reason is that consumption will continue to be challenging in the future, as the steel industry’s business results will continue to be negative. According to VCBS data, a handful of significant steel companies had to partially cease operations. In particular, Pomina Steel, Hoa Phat, and numerous other enterprises in the steel industry shut down their furnaces in Q4 of 2022 and partially reopened them earlier this year.

The production of construction steel reached 2.7 million MT in the first quarter of 2023, a drop of 23 per cent from the same period in 2022. Sales of construction steel reached 2.6 million MT, a decrease of 28.5 per cent compared to the same period in 2022; while exports reached 422,000 MT, a fall of 41 per cent.

The WSA predicted that global steel demand will increase by approximately 1 per cent in 2023 as a result of public investment and a managed energy shortage. Particularly, the ASEAN region will lead the development of steel consumption due to its strong infrastructure investment orientation.

According to the VSA, this will continue to be the primary export market for Vietnamese steel in the future.

According to the proposed strategy to for the nation’s steel industry to 2030 by the Ministry of Industry and Trade (MoIT), the overall demand of Vietnam’s manufacturing sectors could reach $310 billion between now and 2030. In which, automotive manufacturing and mechanical design for industrial activities comprise the majority of the economy.

The MoIT believes this will be a substantial market for the domestic steel industry, particularly for high-quality fabricated steel and stainless steel for the manufacturing sector.

Hoa Phat Group announced in March that it will concentrate on manufacturing goods such as hot-rolled coil used in the production of galvanised steel sheets, container shells, and steel pipes for the naval construction and auto-shell industries. Chairman Tran Dinh Long stated that the group will regulate production based on market conditions, with a focus on developing high-quality steel.

In addition, steel companies have greater expectations due to the government’s economic stimulus programme. Specifically, there is a support initiative of $5 billion in tax credits for the social housing market and the construction of at least one million social housing units. As of March, according to the Ministry of Construction, the nation had completed over 300 social housing projects in urban areas with a construction scope of approximately 157,000 units.

In the meantime, the MXV indicated that the State Bank of Vietnam’s interest rates have been lowered to support the economy and that demand will increase, particularly in the second half of this year.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes