Hoa Sen and Nam Kim not threatened by new Indonesian tariffs

Domestic steel giants Hoa Sen Group and Nam Kim Group do not expect negative impacts from the Indonesian government’s high anti-dumping duties imposed on colour-coated steels.

Indonesia imposes anti-dumping duty on Vietnamese and Chinese colour-coated steel

Indonesia has just announced applying anti-dumping duty of 12.01-28.49 per cent on colour-coated steel products imported from China and Vietnamfor five years. vietnamfinance.vn stated that accordingly, the two domestic steel manufacturers Hoa Sen Group and Nam Kim Group will be imposed tariffs of 12.01 and 19.16 per cent.

Previously, Indonesia has been imposing similar taxes of 13.5-36.6 per cent on cold-rolled steel products imported from Vietnam, China, Korea, Japan, and Taiwan since 2013 and has continued to maintain the safeguard measures after the country’s anti-dumping investigation in September 2015.

New tax may have slight impact on Vietnamese steel manufacturers

According to Viet Dragon Security Company (VDSC), Hoa Sen Group and Nam Kim Group will not suffer much of an impact from the Indonesian government’s tax because exporting colour-coated steel has never been a major activity of the Vietnamese steel industry.

Specifically, in 2017, the total output of domestic steel exports reached 1.6 million tonnes, including 47 per cent of galvanised steel, 38 per cent of cold sheet metal pads, and just 17.1 per cent of colour-coated steel, equalling 278,000 tonnes.

VDSC also estimated that nearly three-quarters of colour-coated steel manufactured goes to serve the domestic market. In 2017, the total consumption of colour-coated steel was 1.1 million tonnes, while 278,000 tonnes were exported, equalling 28 per cent of the total consumption.

The security firm also stated that domestic steel manufacturers tend to focus on developing products of gavalnised steel and cold sheet metal pads, and are steadily reducing colour-coated steel production because the durability and profit margins of the first two product categories are higher. Manufacturers like Hoa Sen and Nam Kim also have smaller capacity of colour-coated steel than other steel products.

Thanks to Hoa Sen Group’s great market share and revenue from its retail chains over the country, the firm does not depend on exporting activities, as 70 per cent of its products go to the domestic market, while the rest is distributed to 70 countries.

Indonesia used to be Nam Kim Group’s main market, taking up 60 per cent of its export output in 2015. However, by taking advantage of the globalboycott of Chinese steel, Nam Kim has expanded its export range to reduce indonesia’s portion in its exports to 40 per cent in 2017. In addition, the firm’s colour-coated steel output last year only made up 13 per cent of its export output.

Thus, the new Indonesian tariffs may not impact the two domestic steel manufacturers significantly.

Source: vir.com.vn