News Room - Steel Industry

Posted on 11 Mar 2008

Imported steel gets edge on local market

Imported steel has been considered as a good choice for domestic steel exporters in recent months, as it is noticeably cheaper than imported pig-iron and steel produced within the country. 

Steel traders have said that they make higher profits by importing steel from foreign countries, specifically China, than by importing pig-iron or using domestic steel.

"We receive additional profits of US$60-70 per tonne if we buy the steel from China", said one steel trader.

Over the past few months, the steel supply on the domestic market has not been able to meet demand, causing steel prices to increase.

Moreover, China has increased the export tax on pig-iron from 15% to 25% since the beginning of this year.

The new tax has strengthened the competitiveness of steel produced in China.

With the new tax level, each tonne of steel produced in China is 500,000 dong (US$30) cheaper than one tonne of steel produced in Vietnam.

A figure from Vietnam general Customs shows that in January 2008, nearly 872,000 tonnes of steel were imported into the country. Of this, more than 50% was from China, most was imported through harbours in HCM City and Hai Phong harbour.

Experts said the amount of imported steel and pig-iron in January had increased by 15% over the same period last year.

One-month ago, when a large amount of steel was imported from China, the prime minister sent a dispatch ordering the Ministry of Finance and the Ministry of Science and Technology to investigate.

The Vietnam Steel Association (VSA) was also instructed by the Ministry of Industry and Trade to examine steel stores and steel distributors in order to stabilise steel prices on the domestic market.

Information provided by the VSA said that prices on the international market in February were, continually increasing, causing prices on the domestic market to go up by 500,000-700,000 dong (US$43) per tonne.

Steel prices at member companies, such as the Vietnam Steel Corp (VNSteel), have also increased by at least 500,000 dong per tonne.

Pham Chi Cuong, chair of VSA, predicted that the price of steel would continue increasing through March.