Technology of steel industry is still low
According to a report from the Ministry of Industry and Trade, in terms of pig iron technology, up to now, the Vietnamese steel industry has only produced pig iron using blast furnace technology. This is the same technology that the world is using mainly because the advantage of this technology is stable production with large output.
However, the blast furnaces in Vietnam are small and very small, the old generation, almost abandoned in the world. Currently, the largest furnace in Vietnam is the 750 m3 blast furnace of Hoa Phat Group, while countries like China use the kiln above 2000 m3 mainly and only 2 blast furnaces (in total 55 blast furnaces) of a capacity of less than 1,000 m3.
Regarding steel-making technology, steel-making with electric arc furnaces is the most popular steel-making technology in Vietnam. Electric furnaces with advanced technology with the most modern equipment in the country are electric furnaces with a capacity of 120 tons / batch of Pomina Steel Joint Stock Company, meeting the economic – technical norms at the advanced level of the world. gender. In addition, there are FUCO Steel Co., Ltd. with a capacity of 90 tons / batch, Phu My Steel with a capacity of 70 tons / batch, Vietnam Steel Company (Pomina 2), Vietnam Italy Steel Joint Stock Company using an electric furnace of 60 tons / batch. Batch and Thai Nguyen Iron and Steel Company use electric furnace of 30 tons / batch (using liquid iron at the rate of 50 ÷ 60%) to produce billet.
According to the report of the Ministry of Industry and Trade, most of the electric arc furnaces in use are equipment made in China, Taiwan or domestically manufactured, belonging to a small furnace, outdated technology, with specifications. Main techniques such as power consumption, graphite electrode, raw material consumption (scrap steel), the time of training are all high compared to the world average. Most of the facilities using main materials are scrap steel. Steel making with electric arc furnaces is a fairly common technology in the world (accounting for 30-40%).
Currently, Vietnam’s steel industry is mainly focused on rolling steel. Assessing technology level, it is possible to divide steel rolling mills into 3 groups.
In particular, the group with advanced technology and equipment are joint-venture or newly built factories such as Vinakyoei, Phu My Steel of Southern Steel Company, Pomina of Pomina Steel Joint Stock Company, and Hoa Phat Steel. , Posco … The plants use technology and equipment of Italy, Japan, belonging to the new generation, relatively modern, have a high degree of automation, producing with a scale of 500,000 – 1,000,000 tons. /year.
The group with medium technology and equipment level is the old factories of Thai Nguyen Iron and Steel Joint Stock Company, Da Nang Steel Joint Stock Company, FDI enterprises (Vinausteel, SSE, Tay Do, SunSteel), Cong Viet Nhat Hai Phong Steel Joint Stock Company, Thai Nguyen Iron and Steel Joint Stock Company, Nam Do Steel Joint Stock Company. The plants are using Chinese equipment with a production scale of 120,000 – 200,000 tons / year.
The group has outdated technology and equipment, including small rolling mills, small rolling workshops belonging to small-scale mechanical and private companies, using domestic manufacturing equipment, with a capacity of 5,000 – 20,000 tons / year.
Poor competitiveness, excess production capacity
The Ministry of Industry and Trade assessed that, in the past time, the products of the industry, depending on each type, fully or partially met the domestic demand. However, when compared with other countries, it can be seen that the competitiveness of Vietnam’s steel industry is weak due to its small scale, not yet reaching the economic scale, low and medium technology level, fuel consumption. High price.
In addition, the investment structure of the industry is unreasonable, most businesses only focus on importing chains and billets to rolling steel, producing a product whose supply has far exceeded the needs of market. Consumer product market depends heavily on external products, precarious product prices are difficult to control.
Analyzing the competitiveness of each product shows that the steel billet is assessed to be quite competitive in the domestic market, mainly because the supply has not met the demand. Meanwhile, the quality of construction steel is similar to that of other countries in the region but the competitiveness is low because production is dominated by external factors, most production facilities do not invest from upstream stage. (billet production) to downstream (rolling out the product), so it depends on imported embryo sources, billet prices, foreign exchange rates …
Notably, the draft report also indicates that there was an excess of some steel products. Specifically, production capacity of the whole industry in 2015 was 3,079,000 tons of welded steel pipes, 5,750,000 tons of cold rolled steel sheets, while total sales of welded steel pipes and cold rolled steel sheets in 2015 were 1,548 respectively. 000 tons and 2,930,000 tons. Because supply exceeds demand, factories must produce in moderation, not promote efficiency or seek export direction.
The further the imbalance between the supply and consumption of the market, the more fierce the competition between enterprises of all economic sectors. In addition, domestic products are also competing with imported products manufactured from advanced technology countries such as Japan, Korea, China ….
Profits of the industry were not stable, for 3 consecutive years from 2012 to 2014, the steel industry was not profitable. A number of bankrupt, non-operating or moderately steel-producing enterprises only reach 30 ÷ 50% of their designed capacity. The reason is due to inflation and economic recession, higher production costs than product prices, imported products are cheaper than domestic products …