Vietnamese steelmakers continue to face difficulties in production and sales because of fierce competition with imported Chinese steel and over supply.
Do Duy Thai, general director of The Viet Corporation that holds 61.7% of shares at Pomina steel, complained that 300kt of steel had been imported from China at zero per cent import tax by taking advantage of a loophole allowing steel made by the oxygen-converter process to enter Vietnam free of duty.
The Chinese imports are said to have seriously affected the domestic steel industry because its selling price is US$20-30/t lower than locally made steel.
The price of local steel products fell by VND2M ($95.2) to VND15.4-17.8M ($733-847) in the north of the country and VND16-18M ($762-857) in the south.
Vietnam Steel Corporation general director Le Phu Hung said in the first half of this year, seven out of 13 corporation members and its five joint ventures had suffered losses due to difficulties in production and sales.
The association also reported that in the first half of this year, sales by the local steel industry increased year-on-year by 6.84% to 5.8Mt, including 1.4Mt for export, much to ASEAN nations.
Consumption of construction steel fell by 8.5% year-on-year falling to 2.39Mt in the first half of the year and stockpiles of semis reached 500kt.
Tran Van Kham, director of Thai Nguyen Steel Company, said the company would face difficulties reaching its targets in the second half of the year, including producing 314kt of steel and 204kt of steel semis.
Director of Southern Steel Company Ta Trung Hieu said in the first half of this year, the company was unable to achieve most of its targets for production and sales against the same period last year. He also predicts the second half will also be a difficult period.
The Ministry of Industry and Trade said five more steel companies were under construction with a total capacity of 1.5Mt/y, bringing the national total capacity of steel to 11Mt/y.
Steel imports still increased sharply in the first half 2013, the Association said. Imports surged 28.5% in volume to 4.88Mt and 13.7% in terms of value to $3.51bn in the first half of 2013.
Source: Daily ‘Vietnam News’, Hanoi; 2 Aug 2013