Vietnam's finished steel production is expected to grow by 5-7% this year, Vietnam Steel Association (VSA) chairman Nghiem Xuan Da said at Kallanish Asia Steel Markets 2024 in Ho Chi Minh City on Wednesday.

Activity was disappointing last year as the country witnessed subdued domestic demand due to a slowdown in the construction and real estate sectors. Vietnam's finished steel demand in 2023 reached 28 million tonnes. 

However, for 2024, Nghiem said: “We have an optimistic outlook for the year, driven by increased infrastructure investments, government spending, decreased interest rates and also the amended land law”.

Vietnam amended the Land Law 2024, which was passed in January and will support domestic steel demand in the coming years.

The amendment, effective from 1 January 2025, is set to benefit the real estate sector by ensuring fair land valuation and rent payment methods, fostering transparent transactions and boosting investor confidence.

“Despite the overcapacity, Vietnam’s steel capacity is expected to touch 40m t/year in the next few years,” Nghiem observed.

Kallanish Asia editor Tomas Gutierrez warned of a looming threat posed by increased flat steel exports from China. He highlighted that in 2023, Vietnam emerged as China's top export destination within the ASEAN region, partly due to the absence of import restrictions.

Consequently, the future trajectory of Vietnamese steel production hinges on whether domestic growth can outpace the influx of Chinese exports.

As Vietnam navigates these challenges, the balance between domestic production and Chinese imports will determine the country's steel industry direction in the coming years.