News Room - Steel Industry

Posted on 16 Oct 2009

Imported steel prices cause heavy pressure on domestically made products

Imported steel continued flooding Vietnamese market and caused heavy pressure on domestic steel makers to lower the selling price. The imported steel supply mainly comes from Asean countries like Malaysia, Thailand, and Indonesia with the preferential import tariff of 5 percent.

 

Vietnam Steel Corp (VNS) has announced to cut down the wholesale price for rolled steel by 200,000 dong per tonne compared with midst September to 11.32 million dong per tonne (VAT exclusive). Other steel enterprises also posted the same reduction.

 

The steel consumption market suddenly stands still although the rush-hour construction season comes and the rolled steel import continued entering Vietnam. Meanwhile, in September only, the steel sales of VNS in the southern region reached nearly 35,000 tonnes while the domestic stockpiled volume was 60,000 tonnes.

 

With the selling price of 11.1 million dong per tone (VAT inclusive), the price of rolled steel imported from Malaysia (enjoy the import tariff of 0 percent) is cheaper 700,000 dong per tonne against the domestic price.

 

Many construction investors said they received price offers from some shops and traders of imported rolled steel (originated from Malaysia, Thailand and Indonesia). However, few of them selected to buy such kind of steel because most imported steel is not enclosed with name of producers clearly.

 

According to Nguyen Tien Nghi, vice chair of Vietnam Steel Association (VSA), the association is tracking closely the movement of steel import from Asean nations in recent months. The steel volume accounted for 12 percent in 2008 but jumped to over 80 percent in late September 2009.

 

In which, the imported steel output is no less than 30,000 tonnes a month. Thanks to the import tariff of 0 percent plus the global price of $480-490 per tonne, the steel volume coming from China continued being in surplus and offered at cheaper prices, Nghi analysed.

 

Quoting Do Duy Thai, general director of Viet Steel JSC (Pomina), the steel import caused heavy pressure on domestic production. If being subjective, domestic manufactures will lose customers easily, Thai admitted.