In 2024, the total aluminum output reached nearly 1.5 million tonnes, equivalent to USD 4.2 billion, representing a 14.5% increase compared to 2023.
According to the Vietnam Aluminum Extrusion Association (VAA), over the past decade, the number of plants, production scale, and total output have all doubled. In 2024, total aluminum production reached nearly 1.5 million tonnes, equivalent to USD 4.2 billion, marking a 14.5 % increase over 2023. Among this, extruded aluminum accounted for 650,000 tonnes (43.3 %), recycled aluminum exceeded 250,000 tonnes (16.7 %), with other aluminum types making up the remaining 40 %. Vietnam’s aluminum export value in 2023 reached USD 2.15 billion. The size of Vietnam’s aluminum market in 2025 is estimated at USD 4.53 billion.
At the 2025 Vietnam Aluminum Industry Business Forum themed “Recognizing Opportunities and Challenges for the Aluminum Sector,” Mr. Vu Van Phu, Vice-Chairman cum Secretary General of VAA, stated that the potential for breakthrough in the aluminum sector is very large.
It is forecasted that by 2030 aluminum demand will increase by 25 % compared to the current level. Construction and infrastructure aluminum is expected to see the fastest growth at about 13 % during 2024–2029. The Ministry of Construction predicts that aluminum for construction will grow 25 % over the next five years, supported by policies clearing investment bottlenecks in real estate projects.
MANY CHALLENGES SURROUND THE INDUSTRY
Vietnam is party to 17 free trade agreements—particularly RCEP, EVFTA, and CEPA—which offer promising prospects for the aluminum industry thanks to zero import tariffs on raw materials and zero export duties on most finished products for end users. At the same time, Vietnam holds comprehensive strategic partnerships with nine major countries such as China, Russia, the U.S., and Japan. Moreover, global aluminum demand is very high, creating unlimited opportunities for Vietnam’s aluminum sector.
Nevertheless, the current challenges are significant. Although Vietnam already exports aluminum to major markets such as the U.S., China, Japan, and South Korea—accounting for 25 %, 14 %, 11 %, and 10 % of industry export values respectively—domestic enterprises only contribute 20 % of total export value. Meanwhile, aluminum businesses face geopolitical and global economic impacts, export market stagnation, and continuous trade barriers—tariff and non‑tariff measures, and environmental regulations—imposed by major markets like the U.S., EU, Japan, and Australia.
Specifically for the U.S. market, from June 2025 the export tariff on aluminum rose to 50 %. Vietnamese companies have encountered increasing difficulty expanding into export markets, with rising risks of trade defense investigations, deterring expansion investments.
According to Mr. Truong Minh Hai, Chairman of Nam Hai Group and EuroHa, Vietnam’s aluminum industry isweak in capital, workforce, technology, and product range. Pressure to adopt green transformation and ESG (environment–social–governance) standards exists but is unmet due to lack of guidance, funding, and technical staff in metallurgy, digitalization, and emission management. Additionally, capacity to produce high‑quality aluminum remains limited; the largest aluminum smelting process—electrolysis—is not yet domestically feasible. The sector depends heavily on imported raw materials, and persistent overcapacity has yet to be resolved.
Moreover, businesses lack understanding of international law, export–import regulations, and struggle to access demanding markets. Participation in trade promotion and global exhibitions is also challenging because most companies are small or medium sized with limited resources.
TAX SUPPORT AND EXPORT PROMOTION
To help aluminum companies overcome these challenges, Mr. Phu recommends accelerating digital transformation, green transition, ESG governance, quality stabilization, and building a Vietnamese aluminum brand to capture market share and replace imports. He calls for appropriate policy adjustments to boost production and trading: reducing VAT, cutting export tariffs by 5 %, providing ESG practice guidance, and supporting green credit. Simultaneously, expanding markets by leveraging FTAs, learning from foreign-invested firms, and training skilled technical staff to meet industrial needs are essential.
VAA leadership proposed reducing the export duty on aluminum under HS code 7604 from 5 % to 0 %, at least for the U.S. market. Previously, when the rate was around 10 %, businesses could manage. But since June 2025, the U.S. raised the rate to 50 %, and without prompt reduction, exporters risk bankruptcy. Even firms engaged in both domestic and export production face declining revenues and losses.
Mr. Vu Ba Phu, Director General of the Trade Promotion Agency under the Ministry of Industry and Trade, noted that while opportunities always come with challenges—and that the U.S. aluminum export duty rising from 23 % to 50 % may seem to threaten market access—it also offers an impetus for comprehensive industry reform. Without early changes, improving competitiveness domestically and globally will be very difficult.
“Vietnam ranks third globally, accounting for 12‑13 % of world bauxite reserves, so we have a solid basis to produce aluminum raw materials. Currently, we only have the Nhan Co Alumina Plant, so our aluminum smelting industry is still very young,” Mr. Phu observed. He also pointed out that electricity prices in Vietnam are about 25 % lower than many regional countries—and just one‑third of EU rates—an important advantage for the energy‑intensive aluminum smelting industry. Moreover, ESG compliance costs and CBAM (Carbon Border Adjustment Mechanism) impacts are currently minimal…; domestic market opportunities are huge as Vietnam continues industrialization and modernization.
For foreign markets, significant opportunities remain via 17 FTAs, with average import tariffs dropping to zero from 2019–2022—except Israel and the UAE, which will reach zero by 2027. According to Mr. Phu, foreign market opportunities beyond the U.S. are still substantial; the critical factors are brand and product quality. The sector needs to overcome weaknesses by building brand identity, horizontal and vertical linkages to form value chains, rationalize production processes, and reduce cost. Short‑term advantages put Vietnam ahead of global competitors; in the medium and long term, coordinated efforts are needed to create higher value‑added products and build a national brand.
PROPOSAL TO PILOT VAW ESTABLISHMENT
To develop the aluminum industry, Mr. Truong Minh Hai proposed to pilot the establishment of a Vietnam–World Aluminum Alliance (VAW). This could be an alliance or joint venture among domestic aluminum exporters with shared export ambitions, based on solidarity and disciplined business principles.
The alliance aims to boost competitiveness by pooling capital, technology, workforce, experience, and optimizing production. It will help expand markets, jointly seek new opportunities, and leverage FTAs. At the same time, the alliance reduces risks by sharing information, experiences, and export–import procedures and market regulations.
Regarding specialized strategies, Mr. Hai suggested dividing production domains so each company focuses on its strength, optimizes resources, reduces duplicate investment, raises product quality, and creates a complete value chain. “Sustainable long‑term success is not easy. But if we never begin, we'll never arrive. Piloting VAW on a moderate scale is a strategic step to lay the foundation for the strong and sustainable development of Vietnam’s aluminum industry on the global map,” he emphasized.
Worldwide, the VAW model has succeeded in the automotive and banking sectors—Taiwan’s business alliances have demonstrated effectiveness in exports. The VAW roadmap: Phase 1 – identify potential businesses and establish legal framework and organizational structure; Phase 2 – pilot the model on a moderate scale, evaluate its performance, and make timely adjustments; Phase 3 – scale up to global export operations. With long‑term vision, VAW aims to become a high‑quality aluminum production hub, elevate Vietnam’s aluminum standing, and establish a strong national aluminum brand.
Source: vneconomy.vn
