Vietnam’s Steel Export Strategy: Navigating Protective Barriers and Loophole Pressure

Based on the current situation of the Vietnamese HRC market as of late December 2025, here is a short commentary on the export supply activities of the domestic steel industry.

Vietnam’s Steel Export Strategy: Navigating Protective Barriers and "Loophole" Pressure

The Vietnamese steel industry is currently experiencing a profound "decoupling" between its domestic challenges and its international export ambitions. While the domestic market struggles to absorb supply due to cheap, width-circumscribed Chinese imports, the export landscape has become a high-stakes game of regulatory navigation.

1. The Two-Tiered Export Reality

A sharp divide has emerged between Vietnam's two main producers, driven by the European Union’s final anti-dumping ruling in mid-2025.

• Hoa Phat Group has successfully leveraged its 0% anti-dumping duty status, turning the EU into a vital "safety valve" for its massive production capacity (set to reach 16 million tonnes annually by early 2026).

• In contrast, Formosa Ha Tinh and other exporters facing the 12.1% duty are finding the European market increasingly "unbreathable," forcing them to look toward less profitable regional markets or pivot to semi-finished products.

2. The Strategic Pivot to Slabs

As noted in recent market reports, the decline in local HRC sales (with some mills only clearing 80% of their allocation) has triggered a shift in the export supply chain. Instead of competing in the saturated HRC market, mills are increasingly exporting slabs. This move allows producers to maintain blast furnace operations while avoiding the specific finished-steel duties and quotas currently hitting HRC in the EU and India.

3. The Threat of "Import Contamination"

Perhaps the greatest risk to Vietnam’s export reputation in 2026 is the "1.9m width loophole." As Chinese mills flood Vietnam with wide-width coils to bypass local taxes, there is growing concern from international regulators that these products could be processed and re-exported as "Vietnamese" steel. This has already led to increased scrutiny from the EU, which implemented new documentation requirements in early December 2025 to verify the true origin of Vietnamese cold-rolled exports.