Steel consumption witnesses increase

A report from the ministry's Industry and Trade Information Centre showed that when bilateral and multilateral trade pacts come into effect, the industry would be under greater pressure from countries, which will be at a greater advantage, such as the Republic of Korea, Russia and Belarus. In addition, several new production lines, including Vinakyoei, Posco SS and Formosa, would also ramp up competition in the sector. The Finance Ministry had promulgated a circular 161/2011/TT-BTC that took effect at the beginning of this year, and relates to the preferential import taxes that will be levied following the implementation of the ASEAN Agreement on Trade in Goods for 2015 to 2018 period. As per the circular, the import taxes levied on steel, iron ore and alloy imports will be zero per cent. The report said the sharp tax cuts would create both opportunities and challenges for Vietnamese firms. The Vietnam Steel Association (VSA) had said last year that imported steel was up 11 million tonnes, reflecting a 105 per cent year-on-year jump. Of this, 4.78 million tonnes was imported rolled steel, containing 0.0008 per cent boron (Bo) element, and was labelled as metal in order to enjoy the preferential tax of zero per cent. The steel was sold in the market at a price, which was VND1 to 2 million per tonne lower than the price of domestic steel. It was because of this reason that several local steel plants had to cut capacity by up to 60 per cent or face…... [read more]

Prices of steel and construction materials go down In recent months, there has been a sharp decline in the consumption of steel from enterprises under the Vietnam Steel Association. Their total sales in July dropped to only 250,000 tonnes and are expected to slump in the following months. Currently, the selling prices of steel stay at VND17.3 million per tonne and tend to go down. Chairman of the Vietnam Steel Association Pham Chi Cuong attributes the decline in steel consumption to the slow construction tempo in the rainy season. In addition, global steel prices are also declining in tandem with low crude oil production due to economic slowdown. In the past two weeks, the prices of steel and steel ingots have dropped by 20-30 percent compared to about two months ago. Moreover, the price of iron in the world market has also dropped sharply from US$230 to US$180 per tonne. Mr Cuong says the price of steel in the northern region is VND1 million per tonne lower than in the southern region as the production of steel ingots is facing a lot of difficulties. Enterprises cannot export their products as the export tax on steel ingots is high (20 percent) and many local businesses have no demand for ingots. According to leaders from Van Loi Cast Iron and Steel Company, since early August, the volume of ingots in store has reached thousands of tonnes, making it impossible for producers to get a return on their investment. The prices of other…... [read more]

Under Decision 84/2008/QD-BTC, steel ingot will enjoy a reduced export tax duty of 5 percent as of October 7. According to the MoF, the move is aimed at removing difficulties for domestic steel producers. This is the second steel ingot tax cut in the past few weeks. On September 22, the steel ingot export tax was halved from 20 percent to 10 percent. The latest move comes after the Vietnam Steel Association (VSA), has proposed the Government reduce the tax to only 2 percent and then exempt the tax. According to the VSA, domestic steel producers, especially steel ingot producers, lack capital and are facing bankruptcy due to the low demand in the domestic market and the high tax rate, which prevent them from developing an export market. A number of steel producers have been forced to cease production, said VSA Chairman, Pham Chi Cuong. Cuong said producers still have nearly 1 million tonnes of steel worth roughly US$1 billion in stock. The MoF, from early June to mid August, lifted the export duty on steel ingot two times, with the first from 5 to 10 percent and the second from 10 to 20 percent, in a move to prevent domestic producers from exporting steel ingot to make a bigger profit, as domestic steel prices were low compared to world prices. The ministry was afraid that exports could cause a shortage of material in the domestic market. According to the General Department of Customs, steel producers in the first seven…... [read more]

Consumption remains low As the building season is on its way, steel consumption is expected to surge as following a continuous fall in prices. In fact, it remained at a lower level than in the previous months, according to the Vietnam Steel Association (VSA). In October, only 286,000 tonnes of steel was sold, over 100,000 tonnes lower than in August. Pomina Steel Mill’s CEO Truong Quoc Thai said that despite the drop in prices, steel consumption has fallen by about 30 percent since early this year. According to an official from Thai Nguyen Iron and Steel Corporation, the fall in the steel consumption is because consumers are waiting for further price cut. Reasons for the reduction According to the VSA’s Vice Chairman Nguyen Tien Nghi, there are two reasons for the decrease in domestic steel consumption. Firstly, the prices of steel ingots in the global market fell by US$50-60 per tonne in September. Secondly, steel supply far exceeds demand in ASEAN and Chinese markets and these countries are promoting steel exports to Vietnam. Since the beginning of 2009, Vietnam has imported an average of 35,000-40,000 tonnes of steel every month, causing an imbalance between supply and demand in the domestic market. Steel imported from other ASEAN countries is now being sold at around VND500,000-700,000 per tonne cheaper than domestic steel and that is one of the reasons for the fall in consumption. Another reason for the reduction, Mr. Thai said, is that businesses are speculating before the building season gets…... [read more]

Steel import surplus hits US$2.65 billion The MoIT said that the country’s import-export activities have achieved significant results over the past nine months. Exports increased by 35.4 percent while imports were up 26.9 percent. The import surplus just accounted for 9.8 percent of the total exports, which is lower than the target set by the Government. Although, industrial production rose by 7.8 percent in the review period, it is still facing a number of difficulties, such as rising input costs, a decrease in credit capital and high interest rates for loans. Pham Chi Cuong, President of the Vietnam Steel Association, said steel consumption fell drastically sharply over the past three quarters due to public investment cuts and tightened fiscal policies. To ease their difficulties, businesses accelerated exports, and the sharp rise in export volume and cheap prices has resulted in some countries, including the US, listing Vietnamese steel for anti-dumping investigation. Despite achieving 32 percent growth, the garment and textile sector was also facing numerous difficulties. Textile and garment exports to the US and Europe began to fall due to the debt crisis and economic downturn in these markets. Some businesses expressed their concern that the difficult situation will make US importers reduce their import volume, even for signed contracts. It is forecast that it will be more difficult to export in the remaining months of this year. Deputy Minister of Industry and Trade Le Xuan Quang pointed out some solutions for the sector in the remainder of 2011, including…... [read more]

Market analysts have made this forecast despite high consumer demand for a number of commodities at the year’s end, and potential widespread epidemics ò bird flu and blue ear pig disease. However, large stockpiles of commodities will ensure an adequate market supply in the coming months, nipping any price manipulation in the bud, said analysts from the Domestic Market Management Group. Local rice prices are expected to rise slightly due to the usual high demand in the lead up to the traditional Lunar New Year holiday (Tet) as well as the positive signs for rice exports. Prices of fresh food will remain unchanged, except for vegetables which have suffered due to recent harsh weather. There will be no increase in sugar prices as 30 mills are scheduled to be put into operation in November to churn out 120,000 tonnes of sugar. This new output along with the stockpiled volume will meet business demands of confectionary and jam production for the holiday season. Imported milk prices are expected to go up slightly due to fluctuations in the foreign exchange rate. The livestock feed market will remain stable while pork and chicken prices are dropping significantly. Fertilizer prices are likely to increase slightly as farmers are preparing for the winter-spring crops. Unlike in previous years, steel consumption is falling considerably due to stagnation in the real estate market and high ending interest rates.... [read more]

In the first 11 months of this year, total output of building steel gained a year-on-year increase of 30.1% to reach 6.1 million tonnes, the association said. This was the highest average growth rate of steel in recent years. Meanwhile, steel consumption saw a year-on-year surge of 24.3% to 5.9 million tonnes of steel in the first 11 months of the year. Vietnam Steel Corporation and Hoa Phat were the two leading manufacturers in the local steel market, with an output of 1.35 million tonnes and 1.27 million tonnes of steel, respectively. The association reported in November that steel makers manufactured 1.3 million tonnes, 28% higher than the same period last year, including 627,700 tonnes of building steel. Meanwhile, the volume of consumption of building steel surged by 30% year-on-year to 593,000 tonnes. In November production, consumption and exports of galvanised sheets fell compared to October, though it grew in comparison with the same period last year, the association reported. In November, output of galvanized sheets reached 290,000 tonnes, 5.2% lower than October, but 39% higher than the same period last year. Sales of galvanised sheets stood at 197,600 tonnes, 4% lower than October, but 23% higher than the same period in 2014. Nguyen Van Sua, VSA deputy chairman, said recovery on the local property market had created positive impacts on steel consumption in the domestic market. But, the local steel industry still faces competition from cheap steel products from China, he said, therefore the industry expects the relevant offices…... [read more]

The Ministry of Industry and Trade on December 22 announced that Minister Tran Tuan Anh has decided to hire a foreign consulting company operating in Vietnam to draft an investment plan on steel by 2025 and visions till 2035. The foreign firm will bring out the development trend of the steel industry in the Southeast Asian region and the world.In addition, it will make clear the competitiveness of the country’s steel industry compared to the region and the world, standards to choose contractors and technologies, and environment impacts of the draft plan.The message which minster Tran Tuan Anh wants to send to the plan drafting board is not to barter environment for steel projects, according the ministry.That is the second draft plan on Vietnam’s steel production. After the company completes its estimation works by the second quarter next year, the ministry will issue the third one and submit it to the Prime Minister to consider and make a final decision.Previously in September, Deputy Prime Minister Trinh Dinh Dung affirmed that Vietnam needs to boost basic industries including steel to be successful in the country’s industrialization cause.Last year, Vietnam was the largest steel consumption nation in the Southeast Asia region.... [read more]

Viet Nam News HÀ NỘI - The Ministry of Industry and Trade is planning to take trade protection measures against cheap and sub-standard steel products imported from abroad, in line with international trade rules. In the draft planning of steel production to 2025, with a vision to 2035, which has been circulated for opinions, the ministry said it would build technical barriers to prevent the import of steel products the origins of which are not regulated in international commitments that Việt Nam has signed. The planning's purpose is to promote the sustainable development of the steel sector, ensure environmental protection and help protect Vietnamese steel makers from unfair competition. According to Nguyễn Văn Sưa, deputy chairman of the Việt Nam Steel Association (VSA), steel imports, especially cheap steel products from China, are still flooding the Vietnamese market, mostly in the forms of scrap steel or semi-finished products. As of October, Việt Nam imported 15.8 million tonnes of steel and iron, worth US$6.62 billion, of which Chinese steel and iron accounted for 60 per cent. Sưa said cheap Chinese steel was a threat not only to Vietnamese steel producers but also those in ASEAN countries and the world. To prevent Chinese steel exporters from taking advantages of the loophole in Vietnamese laws to evade taxes, authorities must set clear standards of steel import products. He gave an example that by adding a few other metal elements, Chinese makers can easily turn pure steel into alloy steel to enjoy 0 per cent…... [read more]

HCM City (VNA) - The steel industry is likely to enjoy 10-12 percent growth next year, said the Vietnam Steel Association (VSA) at a workshop in HCM City last week. According to Chu Duc Khai, VSA General Secretary, steel consumption depends on the country’s gross domestic product (GDP) growth. With expected GDP growth of 6.2 percent this year, and the operation of 10 steel projects in 2017, the sector’s growth is expected to further expand, Khai said. However, he warned of challenges ahead as cheap steel from China would continue to flood the domestic market. Vietnam also has to meet strict technical standards when it exports steel. To cope with difficulties, the country will have to apply trade protection measures and technical barriers to restrict steel imports, he noted. The VSA has filed petitions to the Government demanding anti-dumping measures be imposed on several steel imports. The association has also sent a document to the Ministry of Industry and Trade (MoIT) to propose some changes in the draft zoning plan for Vietnam’s steel sector until 2025 with a vision towards 2035. Accordingly, the association suggested the ministry propose the Government a stop in managing the steel industry by planning. Regarding the current practices, a steel project cannot be approved if it is not named in the master plan for the industry. VSA Vice Chairman Nguyen Van Sua, said that economic sectors including steel should not be managed by planning. Instead, the zoning plan for Vietnam’s steel sector should be used…... [read more]

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