News Room - Steel Industry

The Vietnam Steel Association asked the government to triple steel-billet import taxes to 15 percent to help local producers clear stockpiles.

The proposal was submitted to Prime Minister Nguyen Tan Dung for approval last week, Pham Chi Cuong, chairman of the association said in a telephone interview Tuesday from Hanoi. An official at the Prime Minister’s office, who declined to be identified, said the proposal will be considered.

“We need a tariff barrier to protect the industry since many countries have been selling steel billets at very low prices,” Cuong said. “The measures are also expected to stimulate consumption of domestic-made products.”

The slowing global economy has crimped demand for steel from manufacturers and builders, prompting mills in China and elsewhere to cut prices and push exports. Demand in Vietnam has also fallen as higher interest rates hurt the construction industry.

Local producers had 450,000 tons of billets and about 200,000 tons of finished steel in stock at the end of February, Cuong said. Consumption in the domestic market fell 28 percent to 220,000 metric tons in the first two months from a year earlier, he added.

The total capacity of Vietnamese producers was around 2.7 million tons last year and is forecast to reach 5.5 million tons this year and may lead to a “surplus,” Cuong said, without providing comparable figures.