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Ministry proposes changing steel taxes
The Ministry of Industry and Trade (MoIT) has asked the Ministry of Finance to cut the export tax on steel ingots, while increasing the import duty on laminated steel to help boost domestic production.
Under the proposal, the import duty on laminated steel will be raised from the current 5 per cent to 7 per cent, while the export tax on steel ingots - the raw material for refined steel - will be cut from 20 per cent to 5 per cent.
According to the Viet Nam Steel Association (VSA), the domestic steel industry is facing major difficulties because of the sluggishness of the steel market. It said steel sales in August plunged to a five-year low of just 120,000 tonnes, against the monthly average of 250,000 tonnes previously.
The association forecasts that domestic steel ingot consumption will continue to fall over the next few months.
VSA chairman Pham Chi Cuong attributed the fall in steel demand to a reduction in the number of construction projects in the wake of the Government's decision to cut investment to curb inflation. In addition, construction work would generally tail off in the rainy season, he said.
Cuong said many steel producers were bemoaning the fact that consumption had fallen, and had cut production as a result.
The decline in steel consumption has also forced steel ingot producers to scale down production to avoid huge losses. Even so, they are still finding it difficult to off-load mounting stock. The association estimates that domestic steel ingot producers have roughly 500,000 tonnes of steel ingots stockpiled.
Domestic producers of steel ingots say they are suffering serious cash-flow problems and on the brink of bankruptcy.
VNN
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