Posted on 05 Aug 2015
Most local steel manufactures are struggling with mounting competition with finished steel products made of cheap steel ingots imported from China since the middle of this year.
The flooding of low-priced ingot imports from China since mid-June have made life tough for many steel makers using local steel ingots to turn out products, said Vo Thi Hanh, director of Viet Phap Steel Co. Ltd. based in the central province of Quang Nam.
Viet Phap Steel buys local steel ingots at VND7,700-7,800 per kilogram while a kilogram of Chinese steel ingots is sold at VND7,000 on the domestic market. Therefore, the company is unable to compete with rolled steel made of such cheap materials, Hanh told the Daily over the weekend.
The biggest concern of Viet Phap Steel is how to reduce inventories. The company has not accelerated production despite declining material prices.
Speaking to the Daily on the issue, Nguyen Van Sua, vice chairman of the Vietnam Steel Association (VSA), said the association has got many complaints about China’s dirt-cheap steel ingot imports.
Sua said some local producers have shifted to steel ingot imports from China to produce products instead of importing steel scrap to produce ingots to enjoy higher profit margins.
However, the association is concerned that the products made of cheap material imports might be of lower quality than those made of local materials.
Data of the General Statistics Office showed steel imports in the January-July period amounted to US$4.7 billion, rising by 15.1% year-on-year.
In addition to massive imports of steel ingots and finished steel products from China, local makers will have to deal with increasing competition from steel imports from Russia and other markets when more trade agreements between Vietnam and partners come into force.
