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Further ingot steel export tax increase proposed
The Ministry of Industry and Trade (MOIT) and the Vietnam Steel Corporation have suggested raising the ingot steel export tax further, as the latest tax increase to 10% has not helped stop ingot steel exports.
Besides ingot steel producers, other enterprises are now also trying to re-export ingot steel they imported at low prices several months ago to get profit.
It is a concern that the wide-scale export of ingot steel could lead to a lack of ingot steel for domestic steel laminating mills, and drive prices of finished products up.
Currently, finished steel prices are staying at low levels at VND17mil/tonne, while ingot steel producers are exporting products at $1,100-1,150/tonne. This means that the producers still can earn $1,000/tonne after paying the 10% export tax. With the current high price of the dollar, at VND18-18,500/US$1, they can get VND18.5mil for every tonne of ingot steel, which means that the export ingot steel is more expensive than finished steel prices on the domestic market.
Ingot steel producers stated right after the decision on raising the export tax to 10% was released that they would continue exporting ingot steel.
The Vietnam Steel Corporation has proposed raising the ingot steel export tax to 30%. Meanwhile, sources say that the Ministry of Industry and Trade may suggest raising the tax rate to 40%.
Currently, ingot steel imported from China, the main import source for Vietnam, is staying at $1,200-1,300/tonne. Meanwhile, in the domestic market, steel producers have to sell steel at VND15.2-17.5mil/tonne to respond to the government’s request to restrain price increases. The sale of steel has been going slowly due to investors’ difficulties. This has put big difficulties on enterprises, which have turned to exporting ingot steel to settle their financial problems.
VNN
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