Vietnam is likely to become a growing centre of Asian steel exports in the coming years but the key focus for local firms is on booming domestic demand. This view was presented by Trinh Khoi Nguyen, deputy general director of the Vietnam Steel Corporation (VSC), to delegates at the Kallanish Asia Steel Markets conference in Ho Chi Min City last week.

According to a draft plan being reviewed by the Ministry of Industry, Vietnam’s steel consumption per capita could reach 285 kg/person in 2020 and 543 kg in 2035. That will leave total steel consumption surging from 22.58 million tonnes in 2016 to 27mt in 2020 and 56.7mt in 2035.

Steelmaking capacity meanwhile will surge from 32.3 million tonnes/year in 2020 to 66.3m t/y in 2035, according to projects reviewed by the ministry. Almost all the addition will come from blast furnace-basic oxygen furnace capacity, with its share increasing from 65% in 2020 to 83% of total capacity. Slab casting capacity is expected to increase from 0% currently to 32% in 2020 and 53% in 2035.

This investment in capacity will also have a significant impact on Vietnam’s steel imports as more slab and hot rolled coil can be sourced domestically. Exports meanwhile should grow significantly. Vietnamese exports rose 18.1% in 2016 to over 4mt, of which finished steel product exports were up 30% to 3.48mt.

Although demand is increasing and many capacity projects are planned. Existing capacity could have a hard time competing, VSC notes. Small and outdated plants that are currently operating may be forced out of the market or merge into larger groups.