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Vietnam’s steel demand constricted this year: industry official
Vietnam’s steel consumption will stagnate this year after the central bank raised interest rates to fight inflation and the government curbed investment at state-owned companies, the Vietnam Steel Association said.
“The steel industry has been hit hard by the government’s policies to curb inflation,” Dinh Huy Tam, general secretary of the association, said Wednesday in an interview. Earlier this year, the association had forecast growth of 15 percent.
The State Bank of Vietnam has raised interest rates three times this year to 14 percent, allowing banks to charge a lending rate of 21 percent. Vietnam’s economy may expand 6.5 percent this year, according to an Asian Development Bank forecast Tuesday, down from an earlier estimate of 7 percent.
“The lending rate of 21 percent is too high, and it is also not easy to seek loans,” Tam said at a conference in Ho Chi Minh City. “If the central bank doesn’t reduce the interest rate, many steel producers will face bankruptcy.”
The country last year consumed 10.2 million tons of steel, an increase of 3 million tons from a year earlier, Tam said. About 60 percent of steel is imported.
Steel sales in August tumbled to the lowest monthly level in five years after the government ordered state-owned companies to halt nonessential construction projects, The Saigon Times Daily reported on September 4.
Vietnam’s consumer prices also gained 28.3 percent in August, the quickest rate since 1992. Deputy Prime Minister Hoang Trung Hai said on August 28 that the economy had “encountered some difficulties” and it would be “difficult to control the inflation rate” in the final months of the year.
Thanhnien
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