Vietnam’s steel sector will face difficulties in 2010, said the country’s steel association.
It will face fierce competition from imported steel as domestic steel products do not enjoy tax incentives, in line with the country’s commitments to the World Trade Organisation, said chairman of the Vietnam Steel Association, Pham Chi Cuong.
Cuong said a number of steel plants in Vietnam will begin production in 2010, reducing the imbalance between supply and demand but this will cause unhealthy competition among domestically-produced steel products.
But he was optimistic the steel industry will keep growing thanks to the effect of the stimulus packages the government launched in 2009, as well as the increased demand for steel on local and world markets.
The steel sector was one of the country’s few heavy industries that recorded a high growth rate in both production and sales in 2009, at 25% and 30% respectively. A number of companies even posted a sales growth of more than 40% year-on-year.
In 2009, the industry produced a total of 4.7Mt of crude steel, 7Mt of steel products for the construction industry, 2Mt of cold-rolled steel and 1.2Mt of steel plates.
The association forecast that the country’s steel consumption will rise by 10% this year from a volume of 5.3Mt in 2009.
Source: VietnamPlus, Hanoi; 8 Jan 2010