Asian Metal: Mr Hung, thanks for agreeing to the interview. Firstly, please introduce yourself and Thien An materials to us.

Hung: Thanks, I’m glad to accept the interview from Asian Metal. I am in charge of the import and export of flat steels. Frankly, Thien An Company has only just been established by us after a long period working for some of the big groups in Vietnam. We mainly deal in HR coil/plate, thick GI, CRC, PPGL/PPGI/GL, wire rod and many other carbon steels, serving a range of clients, especially responding to enquiries from small end users, as well as construction projects.

As for suppliers, we have established a good relationship with major Chinese mills and their counterparts in Japan and South Korea. We operate a commission pattern most of the time. Our reputation is limited within the market for now, but we have had good exposure with many of the big traders due to our good performance in the past, so I believe our company has the capacity to offer reliable and sound service and grow robustly in the future.

Asian Metal: What products do your clients in Vietnam prefer and how many tonnes do you import from China per month on average?

Hung: We act not only as a trader, holding inventories, but also as a broker, charging commission. Apart from hot rolled and cold rolled carbon coils, we are exploring the market for coated materials. Some clients are now focusing on PPGL/PPGI and GL, as well as thick GI from Chinese mills. We have realized a monthly average sales volume of about 2,000t and are making efforts to achieve a 5000t/m goal. We get inquiries for: PPGL/PPGI (0.24mm - 0.44mm x 1200mm); GL (0.24mm - 0.44mm x 1200mm); and thick GI (0.95mm - 3.0mm x 630 up 1250mm), while the main specifications of carbon hot rolled coils are regularly in demand. If Asian Metal’s clients, especially steel mills in China, are interested, I hope there is a chance of cooperation.

Asian Metal: Now, I’d like to hear your point of view on the market outlook as the Chinese and Vietnamese markets are now so closely related. From the second quarter of this year, Vietnamese started to examine imported hot rolled coils and other products, how’s that actually going?

Hung: Yes, you are right. On June 2014, the new 44th circular announced by our government came into effect. All kinds of steels imported from other countries must now be inspected closely by Vietnam Customs. If materials fail to pass these checks, the importers cannot clear their cargoes. That means higher risks, so I think importers will have strict requirements on product quality and that was also the original intention of the officials.

Asian Metal: Has the flat steel import business been affected yet?

Hung: Basically, this policy has severely affected imported steel quantities, but all importers need to do is purchase according to their business needs and ask suppliers to issue all of the documents which are suitable and necessary for Customs Clearance Procedures. Over time, it will get better. Actually, reliable importers are not affected by these new rules. It just means slightly longer delivery times, occasionally. Generally speaking, business is running normally.

Asian Metal: At the beginning of the month, Chinese mills tried to hike export prices for flat steels, but they have now been forced to reduce their offers in the Vietnamese market because of the weak demand. Do you think importers will accept higher offers in the next few months?

Hung: I think it depends on many factors such as importers’ inventories, their market share and suppliers’ attitudes, whether they want to continue selling at these prices or hang onto cargoes, waiting for a price increase.

For now, since imported flat steels like HR coil are piling up in the marketplace and most importers are holding sufficient stocks, higher import offers are unlikely to be accepted. In addition, local traders suffered quite a bit from the poor conditions during the rainy season, so the recovery of the market still needs time.

Asian Metal: It’s been reported that Vietnam's economy is a little slow and the government is investing more in infrastructure projects like highways. Will the flat steel market in Vietnam be boosted by this?

Hung: You are absolutely right. Vietnam has experienced major inflation these past few years, especially in our real estate sector, which would see a cooling period. Moreover, the inventory index for manufacturing industry has climbed steeply. In August, the index was up by 1% on a monthly basis and 13.4% on a yearly basis.

Vietnam is a big steel importing market rather than a producing country, so inventory levels and purchase costs are key factors. Actually, I think the consumption of steels will be better once the local inventories have been largely consumed at cheaper prices, but the consumption race will be very slow in coming months because of the slow economy.

Asian Metal: Thanks for participating in the interview and sharing so much about the market. We wish you continued cooperation with Chinese suppliers in the future.