The United States is not the largest export market for steel, but price movements in recent years and the almost immediate response of U.S. officials to changes...
According to the latest statistics from the General Department of Customs, by the end of October this year, the whole country exported 420,860 tons of steel to the United States, with a total value of 337.256 million USD. This result decreased sharply in both output and value compared to the same period last year, because by the end of October 2016, the output of steel exported to this country reached 766,648 tons, with a total value of 460 million USD.
Notably, according to our analysis (from data from the General Department of Customs), the average export price of steel products to the United States in the past few years has fluctuated strongly from year to year.
According to information from the Ministry of Industry and Trade, on December 5, 2017, the US Department of Commerce issued a preliminary decision in the investigation of anti-dumping (AD) and countervailing duty (CVD) evasion on corrosion-resistant carbon steel (commonly known as galvanized steel) and cold-rolled steel imported from Vietnam. Accordingly, the US Department of Commerce preliminarily confirmed that tax evasion on these two products is real, specifically from China through Vietnam to export to the United States.
Accordingly, the average export price (as of the end of October of each year) in 2013 was 1,378 USD/ton, in the morning of 2014 it increased to 1,534 USD/ton but in 2015 it fell to 750 USD/ton and in 2016 it dropped to 600 USD/ton but in 2017 it was pulled up to more than 801 USD/ton.
It should be noted that when the price of steel exported from Vietnam to the United States dropped sharply from 1,534 USD in 2014 to 750 USD in 2015, then 600 USD in 2016, along with the sudden increase in output from tens of thousands to hundreds of thousands of tons, immediately in 2016 the US Department of Commerce decided to initiate an investigation against anti-dumping (AD) and countervailing duty (CVD) evasion against steel products imported from Vietnam.
On the other hand, the time when the amount of steel exported from Vietnam to the United States increased while the price decreased sharply coincided with the time when the US initiated an investigation against Chinese steel. Specifically, in 2015, the US initiated an investigation to impose AD and CVD duties on two products: corrosion-resistant carbon steel (commonly known as galvanized steel) and cold-rolled steel from China.
In 2016, the United States officially imposed an AD tax of 199.43% and a CVD tax of 39.05% on galvanized steel from China. For cold-rolled steel, the AD tax rate is 265.79% and the CVD tax rate is 256.44%.
Whether or not Chinese steel is “disguised” as originating from Vietnam and exported to the United States remains to be determined by the authorities.
However, it is clear that the large fluctuations in output and prices of steel or any import-export goods need to be promptly assessed, analyzed and promptly prevented by the authorities to eliminate the risk (if any) of foreign goods “disguised” as originating from Vietnam to be exported to other countries. This not only causes specific damage to each production sector but also significantly affects the reputation and brand of Vietnamese goods in general.