The Vietnam Steel Association has urged authorities not to go ahead
with 27 planned steel plants since local output is already more than
twice the demand.
The association has proposed related authorities to revoke the
licenses of 27 projects, some of which have not been started while
others have proved impractical or are using outdated technology.
Do Duy Thai, vice chairman of the association, told Thoi bao Kinh
te Saigon Saturday that the output of steel rods has risen to as high as
11 million metric tons while the consumption has been around five
million tons and is expected to rise to nearly six million tons this
year.
The quantity of steel billets and steel roofs is also 1.5 to two times the demand.
The supply-demand gap is “unreasonably large,” he said
“We want the government to eliminate unsuitable projects.”
He said the supply surplus should be contained at 30 percent like in other countries so that the industry can continue to grow.
The association said at a meeting with local businesses last week
that the proposal aims to limit the number of foreign invested projects.
It said foreign investors, especially those from China, can take
over the market with their strong financial and technical capabilities,
if the government does not protect the local industry.
This is not the first time the association has sought government
intervention: Late last year too it had asked the Ministry of Industry
and Trade to examine steel projects and eliminate inefficient ones.
Many companies have complained about losses and stopped production
since they lacked the financial and technical capacity to take on the
harsh competition, insiders said.
Pham Chi Cuong, former chairman of the association, blamed the
massive supply situation on the lack of a development plan from the
government, which left many cities and provinces issuing a slew of
licenses.
“The rush to invest has caused a waste,” he said.
