Viet Nam News reported that Vietnam’s Ministry of Industry & Trade’s proposed "Strategy for the development of Viet Nam's steel industry by 2030, with a vision to 2050", has called for additional governmental policies to support the steel industry as Viet Nam's steel industry is facing over reliance on input material imports, small production value and outdated technology. The ministry's conclusion is that the industry's competitive capacity is limited as its production was marred with energy inefficiency and environmental issues. Vietnam’s Minister of Industry & Trade <r Nguyen Hong Dien said “Despite its key role in the country's socio-economic development effort, the industry has not received adequate support, especially from a policy standpoint, due to a lack of tailored and streamlined policies to support its growth. It needs stronger government support for the sustainable and stable development of the industry as well as the country's metallurgy sector with a focus on increasing production of hot-rolled coil, high-quality steel and the establishment of steel mega complexes.”

According to the ministry, Viet Nam's production capacity for steel billets stood at 27 million tonnes in 2021, of which 7-8 million tonnes was hot-rolled coil. With the exceptions of only a handful of large steel mills such as the Hoa Phat-Dung Quat Iron and Steel Complex, the Hung Nghiep Formosa Iron and Steel Complex and Nghi Son Steel, the rest of the country's steel industry was made up of small mills, equipped with outdated machinery and technology.

In addition, the industry lacked the capacity to meet domestic demand, especially for alloy steel which it has not been able to produce. The only long-term solution is to ramp up investment for the construction of large-scale steel complexes to reduce reliance on imports.

The report said "For the most part, the industry is overly dependent on imports of raw materials including ore, scrap and coking coal, resulting in unstable prices. Viet Nam needs to import around 18 million tonnes of ore, 6-6.5 million tonnes of scrap and 6.5 million tonnes of coking coal in 2022.”

Data from the Viet Nam Steel Association showed that January-March 2022 quarter, Viet Nam’s finished steel consumption reached 8.2 million tonnes, up 11.9% YoY while steel exports reached about 2.3 million tonnes. However, the business performance of many enterprises in the industry did not move in the same direction with decrease in profit as the cost of raw materials and transportation fees have skyrocketed. Viet Nam Steel Corporation attributed the profit decline of many of its members to the world's economic and political volatility, especially the influence of the Russia-Ukraine conflict that had pushed up the prices of input materials in the steel industry, such as iron ore, coal, gas and increased freight costs.

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