Hanoi (VNS/VNA) - Over-reliance on input material imports, small productionvalue and outdated technology were among the major weaknesses of Vietnam'ssteel industry, said a recent report by the Ministry of Industry and Trade.

Thereport was part of the ministry's proposed "Strategy for the developmentof Vietnam's steel industry by 2030, with a vision to 2050",which called for additional governmental policies to support the steelindustry.

Accordingto the ministry, Vietnam's production capacity for steel billets stood at 27million tonnes in 2021, of which 7-8 million tonnes was hot-rolled coil. Withthe exceptions of only a handful of large steel mills such as Hoa Phat-Dung Quat Ironand Steel Complex, Hung Nghiep Formosa Iron and Steel Complex and Nghi SonSteel, the rest of the country's steel industry was made up of small mills,equipped with outdated machinery and technology. 

Inaddition, the industry lacked the capacity to meet domestic demand, especiallyfor alloy steel which it has not been able to produce. The only long-termsolution is to ramp up investment for the construction of large-scale steelcomplexes to reduce reliance on imports. 

Theministry's conclusion was that the industry's competitive capacity islimited as its production was marred with energy inefficiency and environmentalissues. 

"Forthe most part, the industry is overly dependent on imports of raw materialsincluding ore, scrap and coking coal, resulting in unstable prices,"said the report. 

Bythe ministry's estimate, Vietnam needs to import around 18 million tonnes ofore, 6-6.5 tonnes of scrap and 6.5 million tonnes of coking coal this year.As prices for said materials remained high, the steel price is expected toclimb, hurting both domestic consumption and exports. 

Theministry said the development of Vietnam's steel industry remained a keycomponent in the country's industrialisation effort as a large number ofindustries including shipbuilding, manufacturing, defence hardware, mining andenergy are highly dependent on quality steel. 

By2030, Vietnam's total demand for steel was projected to reach over 310 billionUSD, of which automobiles alone account for 120 billion USD, industrialconstruction 120 billion USD, railways 35 billion USD and subways 10 billionUSD, among others. 

Despiteits key role in the country's socio-economic development effort, the industryhas not received adequate support, especially from a policy standpoint, due toa lack of tailored and streamlined policies to support its growth, said Ministerof Industry and Trade Nguyen Hong Dien.

Diencalled for stronger government support for the sustainable and stabledevelopment of the industry as well as the country's metallurgy sector with afocus on increasing production of hot-rolled coil, high-quality steel and theestablishment of steel megacomplexes./.