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How import taxes to the US increased dramatically to Hoa Phat, Hoa Sen, Nam Kim and steel companies in Vietnam?

The US market does not account for a large proportion of the export activities of many steel companies. It is estimated that both Lotus (HSG) and Nam Kim (NKG), two pioneers of taking advantage of export opportunities to the US in 2016, consume no more than 5% of total output in the market.
On March 1, US President Donald Trump made the decision to impose sanctions on imported steel and aluminum. Accordingly, the US president said it would impose a 25% tax on imported steel and 10% on aluminum.
This information makes investors worried that Vietnamese enterprises exporting steel to the US will face many difficulties. However, in practice, the import tax on aluminum and steel will not affect the domestic enterprises.
According to Vietnam Dragon Securities (VDSC), based on the consumption capacity of domestic steel mills in general and the share of the US market in the export structure, the imposition of tax will not affect the negative. up to listed steel exporters. Even, the imposition of US import tax on Chinese steel can be a good news and a driving force for in-depth development of the domestic steel industry.
Hoa Phat, Hoa Sen, Nam Kim … do not export too much to the US
The US market does not account for a large proportion of the export activities of many steel companies. It is estimated that both Lotus (HSG) and Nam Kim (NKG), two pioneers of taking advantage of export opportunities to the US in 2016, consume no more than 5% of total output in the market.
These businesses said orders by size, shipping costs and delivery time is not conducive to exports to the US only intended to study the market and supports push consumption. More importantly, the US market is not the target of most of the steel sheet exporters, because export activities in the ASEAN region are still active.
Report of the Vietnam Steel Association said that in the first 11 months of 2017, Vietnam exported 2.4 million tons of steel in the ASEAN countries, and 59% of total steel exports. Exports to the United States only reached 470,000 tons, accounting for less than 11% of total exports. So, in short, the export business of steel sheet of Vietnam if not export to the US market will be almost no difficulty in activity, while demand for domestic and intra-ASEAN still bring Great growth potential.
Opportunity to perfect the value chain of the steel industry
According to VDSC, Vietnamese steel enterprises still have many ways to approach the US market, because the government’s goal is to block Chinese-originated goods from being processed or temporarily imported in other countries to avoid taxes. By producing from upstream or semi-finished products produced domestically, businesses can still prove the origin of Vietnam to sell in the strict market as the US, the EU and Australia.
In the past, Vietnam exported cold rolled and plated irons to the US while domestic producers were unable to supply hot rolled coils (HRC), which were imported (mostly imported from China). ), this is the reason plated steel mills in Vietnam are on the list of US tax consideration.
By 2017, Vietnam’s domestic steel industry has produced nearly 10 million tonnes of crude steel and nearly 1.3 million tonnes of HRC hot rolled coils, all of which are compliant with US regulations. It is expected that in 2019, the new blast furnaces of Formosa Ha Tinh and HPG will be put into operation, raising the total capacity of the domestic market to around 10 million tons per year.

Some large steel projects of the DNNY
VDSC believes that this is a good source of finished products for corrugated steel manufacturers such as HSG and NKG, and is an important factor in “eliminating” rigid rules of origin that apply not only to one but also play a key role in many of the trade agreements that Vietnam participates. Thus, the imposition of taxes on the origin is playing the role of motivating the steel enterprises in Vietnam to invest in depth, production from the upstream, and increase the value for the domestic industry, medium improve competitiveness in the integration market.
Whilst investors are concerned about the possibility of President Trump’s imposition of import duties on steel plates in Vietnam. Hoa Phat Group has received orders to export 15,000 tons of steel to the United States on the first day after Tet holiday. Owning a production chain of more than 2 million tons of construction steel from the upstream and building a hot rolled steel production plant, Hoa Phat is contributing to prove the export potential of Vietnamese steel is still plentiful.
On the stock market, steel stocks such as HPG, HSG, NKG fell sharply, from 0.6% to 1.2%, indicating that investors were not too pessimistic about the outlook of the sector. steel.

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