The Vietnam Steel Association (VSA) has demanded aid for overcomingdifficulties, such as excess supply and growing competition from cheapimported steel that has hit the industry hard.
Demand for steelin the domestic market has been slumping for the last few years,exerting considerable pressure on steel companies, the association said.
Whilethe total annual production capacity for construction steel has reached11 million tonnes already, demand for construction steel is projectedat around 6 million tonnes this year, according to the Ministry ofIndustry and Trade's estimates.
Steel companies said newinvestments in steel production should be given careful considerationand must be based on market demand.
According to Pham Chi Cuong,President of the Vietnam Scientific and Technical Association ofMetallurgy, given the current excess of supply over demand, clubbed withthe 10 percent growth rate per year, it might take a decade to balancesupply and demand.
This calculation does not take into accountthe increase in imported steel in line with the participation in freetrade agreements, which could boost supply further.
The import ofcheap alloy steel containing Boron from China is another headache forthe industry as this kind of steel faces zero tariff and offers lowerprices than domestically-produced steel.
According to the VSA,many steel companies have had to cut their production by up to 60percent or will even face closure if they failed in the competition.
DoDuy Thai, General Director of Pomina Steel Corporation, was quoted byTin Tuc newspaper as saying that while steel demand is low, the influxof steel containing Boron has made competition extremely hard for thedomestic industry.
Still, this remains controversial. Arepresentative from the General Department of Customs said competitionshould spur Vietnamese firms to enhance quality and quote morereasonable prices.
Previously, the Ministry of Industry and Tradehad forecast that steel consumption during the first several months ofthis year will remain slow. — Steel firms continue to seek aid.-VNA
Demand for steelin the domestic market has been slumping for the last few years,exerting considerable pressure on steel companies, the association said.
Whilethe total annual production capacity for construction steel has reached11 million tonnes already, demand for construction steel is projectedat around 6 million tonnes this year, according to the Ministry ofIndustry and Trade's estimates.
Steel companies said newinvestments in steel production should be given careful considerationand must be based on market demand.
According to Pham Chi Cuong,President of the Vietnam Scientific and Technical Association ofMetallurgy, given the current excess of supply over demand, clubbed withthe 10 percent growth rate per year, it might take a decade to balancesupply and demand.
This calculation does not take into accountthe increase in imported steel in line with the participation in freetrade agreements, which could boost supply further.
The import ofcheap alloy steel containing Boron from China is another headache forthe industry as this kind of steel faces zero tariff and offers lowerprices than domestically-produced steel.
According to the VSA,many steel companies have had to cut their production by up to 60percent or will even face closure if they failed in the competition.
DoDuy Thai, General Director of Pomina Steel Corporation, was quoted byTin Tuc newspaper as saying that while steel demand is low, the influxof steel containing Boron has made competition extremely hard for thedomestic industry.
Still, this remains controversial. Arepresentative from the General Department of Customs said competitionshould spur Vietnamese firms to enhance quality and quote morereasonable prices.
Previously, the Ministry of Industry and Tradehad forecast that steel consumption during the first several months ofthis year will remain slow. — Steel firms continue to seek aid.-VNA
