PART
1: OVERVIEW OF VIETNAMESE COATED STEEL SHEETS INDUSTRY
Vietnam has experienced a dramatic year with 2014,
from the East Sea Event in May, to the oil price shocks in September. Despite a
high GDP growth of 5.9%[1],
higher than the growth rate in 2013 (5.2%), and credit growth reached 12.62%[2] as planed,
but the business has not improved as expected. Stock market volatility as the
big waves[3] with
an increase of 140 points in VNindex from 500 points late 2013 to 640 points
and went down 520 points at the end of the year. The housing market remained is
not warmer than 2013, it just became better in last quarter thanks to the
government's stimulus packages as credit package of 30.000 billion VND, and due to
lower interest rates as well as the easing consumer lending by banks. In 2014,
interest rates have fallen nearly 50% from a year earlier, in which short-term
interest rates is around 7%, for long-term loans from 8-12% depending on each
industry[4].
In this context we will see the steel industry of
Vietnam after a year of operation. Firstly, we will go into detail the sector
of galvanized and color coated steel sheet, the sector which has the impression
growth rates recently.
Figure
1: 2014 market share of metallic and color coated steel sheet industry of
Vietnam
Source:
Newsletters in Dec 2014 (VSA)
To be noted that the data of market share above was
calculated based on only data of the members of Vietnam Steel Association (VSA):
internal consumption of all VSA members was reached 1.65 million MT in first 11
months of 2014[5].
It does not include some other companies which has not joined to VSA. In 2014, sales volume of all members in VSA may reach 1.8 million MT, while total consumption of the entire country may reach 2.6 million MT this year.
On
the figure 1, we can see some significant changes are as follows:
-
CSVC has officially entered the Vietnam
market of galvanized steel sheet with a significant market share is 6.8%, with
sales volume in the first 11 months of the year reached 114.039 tons, of which
domestic consumption was 77,000 tons. This company is a joint venture between
Nippon Steel & Sumitomo Metal Corporation and China Steel Corporation,
Formosa Ha Tinh and Sumitomo Corporation just started operation in October last
year[6].
-
Sunsteel holds a significant growth rate
from 7% last year up to 9% this year. This increase was contributed from two
coating lines which were opened in December last year (CGL with capacity
240.000 tpy and CCL with capacity 96.000 tpy).
-
Bluescope Steel market share was
decreased from 5.9% last year down to 3.8% this year due to the booming of
steel production capacity in country, while it still keeps the old capacity.
-
SSSC market share reduced from 7% last
year to 5.3% this year. Since, its production ability was limited. Next year,
SSSC for sure will get a high growth rate of market share when it launch one
CGL 150.000 tpy and one CCL 70.000 tpy into operation (they are under trial
production).
Forecast
for 2015
Figure
2: Total apparent consumption of metallic and color coated steel sheets in 2012,
2013 and provision for 2014 (Unit: MT)
Source:
Data of 2012 and 2013 are from VSA; *calculated by author
Calculate
based on my personal, the consumption of coated steel sheet in 2015 will reach
3.29 million tons, which is equivalent to the forecast of VSA (3.25 million
tons)[7].
The increased output will come from the companies
such as Ton Dong A, after putting into operation a new plant with a CGL 200,000
tpy, SSSC starts up an CGL 150,000 tpy, and CSVC may raise the capacity of the
CGL 300,000 tpy by searching the demands of high quality galvanized products (GA) for the auto industry in which Truong Hai Auto and Vinaxuki have to use 100%
imported raw materials, for instance.
Dinh Long
Dinh Long
[1] http://kinhdoanh.vnexpress.net/tin-tuc/vi-mo/toc-do-tang-truong-gdp-cua-viet-nam-cao-thu-2-the-gioi-3120199.html
[2] http://cafef.vn/tai-chinh-ngan-hang/den-2212-tang-truong-tin-dung-da-can-dich-2014122715514892013ca34.chn
[3] http://www.thesaigontimes.vn/124830/2014-Nam-cua-nhung-con-song-lon.html
[4] http://thuvienphapluat.vn/tintuc/vn/thoi-su-phap-luat/tai-chinh/8498/ngan-hang-dong-loat-ha-lai-suat-cho-vay
[6] http://www.nssmc.com/en/news/20131015_100.html
[7] http://www.baoxaydung.com.vn/news/vn/vat-lieu/nam-2015-nganh-thep-chiu-nhieu-suc-ep.html
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