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Steel stockpiles grow as demand plunges
More than 700,000 tons of finished steel and billets are in stock around the country after consumption plummeted this month, the Vietnam Steel Association (VSA) said.
Pham Chi Cuong, president of the association, said steel makers have around 400,000 tons of imported billets and are unable to find a way to use them since they also have more than 200,000 tons of finished steel.
Billet manufacturers have a further 100,000 tons in inventory, he said.
The VSA has asked the government to cut export duties on billets by 10 percent, he said, noting the existing duty of 20 percent is too high and makes exports uncompetitive.
World steel prices have fallen 30 percent in the past two months.
Deputy Minister of Industry and Trade Le Duong Quang said his ministry would recommend to the Ministry of Finance to consider cutting the tax.
The government should set up an export duty regime that reduces or zeroes the tax when world prices are low or domestic demand plummets, he said.
On August 10, the finance ministry doubled the export tax on steel billets to 20 percent to preempt their re-export for profit.
In Ho Chi Minh City, steel prices have fallen by VND2-2.5 million per ton since the beginning of July to VND18.2-18.5 million.
The average price in the north, at VND17.5 million, is even lower.
The price drop has been caused by sluggish demand during the ongoing rainy season and falling feedstock prices.
The price of billets imported from China has fallen by US$230-240 per ton to $890-920 since the end of July.
Thanhnien
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