US-China trade tensions have made the US dollar (USD) high, while the yuan (NDT) has plummeted. This is forecasted by experts and representatives of the steel industry, which will have both positive and negative impacts on domestic industries.
According to a representative of Vietnam Steel Association, in the past time, the domestic steel industry has had many changes in quality and quantity with a relatively fast growth rate. But every year, Vietnam steel industry still has to import a large amount of finished steel products and semi-finished products from China, accounting for more than 50% of total steel imports. Therefore, when the yuan plummeted, it will certainly have a two-sided impact on the industry.
On the one hand, imported steel products will have a positive impact on businesses because businesses can import them at reasonable competitive prices. On the contrary, when the yuan falls deeply, Chinese steel products such as construction steel, cold rolled steel, and other kinds of steel are likely to massively enter Vietnam, affecting the domestic market. .
Explaining this, Mr. Nguyen Van Sua, an expert in the steel industry, said that the RMB depreciation will make Chinese products more competitive than Vietnamese steel and corrugated products. Since then, it will boost the flow of Chinese goods into Vietnam. In contrast, Vietnamese goods will be more difficult to enter China, since Chinese people have to pay larger amounts to enter the same amount of goods as before.
For the dollar appreciating, Mr. Sua said that businesses that had export contracts paid in USD would benefit in the short term. But in the long term, when the yuan / USD exchange rate continues to fall sharply, Chinese goods will be more beneficial when exported to the United States than Vietnam.
According to Mr. Sua, the most fundamental measure to respond to Chinese steel is still domestic enterprises to improve the competitiveness of products; in which, the most competitive criteria must be price. The production input costs, rationalization of production to increase price competition, while quality must still be guaranteed. In the country, there are also many businesses that have very good market share gains such as Hoa Phat, Hoa Sen, Steel Corporation or Posco … However, towards the state agencies, there is also a need to calculate the market to intervene. , stabilizing the exchange rate in the coming time …
Sharing the same view, Mr. Pham Chi Cuong, Chairman of Vietnam Association of Casting and Metallurgy Science and Technology, and an expert in steel sheet industry for many years, China is one of the major steel exporters. best of the world. Every year, the country exports tens of millions of tons of steel corrugated iron. The devaluation of the yuan will enable Chinese steel sheet products to enter Vietnam more favorably.
Many experts said that the devaluation of the yuan helped lower China’s finished steel prices, increasing the competitive advantage of prices. More likely, in the future, Chinese steel will enter Vietnam in larger numbers. Especially in the context of the US-China trade war, the Chinese steel entering Vietnam, in part, will help to clear the remaining goods in this country, most likely to “wear” goods. Vietnamese to avoid tax, export to third countries.
Not only the steel industry, but also with mechanical engineering, domestic parts production also suffered significantly from this war. According to Mr. Nguyen Van Ket, Director of Vietnam SKD Mechanical Company, the low RMB will facilitate enterprises to import spare parts to produce cheaper than before. But on the other hand, in the long run, businesses also face low-cost products, sold in the same category on the domestic market and also for export.
“This is not a new issue when evaluating, because we also have previous analyzes and forecasts about the effects of this trade war. It is important that the business itself has to restructure production, products sold have quality and reasonable price. In this way, it is possible to keep customers in the markets of the countries. We are also working with Japanese businesses to restructure production and cooperate and supply goods with their side, ”Mr. Ket said.