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Imports to meet 50 percent of steel needs
The country in 2009 will need to import roughly 5 million tones of steel to meet domestic demand which is estimated at 10.5 million tones, according to the Ministry of Industry and Trade (MoIT).
MoIT said the highest demand for steel comes from the construction sector. The demand from this sector alone will be roughly 4.95 million tonnes.
Meanwhile, the country’s need for pig iron this year was estimated at roughly 4.9 million tones, with more than 60 percent or nearly 2.9 million tones coming from domestic production.
To balance supply and demand, MoIT has recently required the steel industry to scrutinize its production and trading plans .
Besides the exploitation of iron ore mining projects, MoIT said the industry’s authorities should speed up the completion of steel ingot and laminated steel production mills to address the imbalance in the local steel market.
Last year was considered a tough one for the steel industry due to a decline in local demand, mainly from construction firms hit seriously by the global economic downturn.
According to the Vietnam Steel Association, the industry consumed and exported roughly 4.45 million tonnes in 2008, a drop of 300,000 tonnes compared to 2007.
This year, the domestic steel industry will be affected by a government decision to increase the value-added tax of steel from 5 percent to 10 percent as of early 2009. The hike is forecast to surge the price for a tonne by roughly 500,000 VND.
World demand for steel this year is also forecast to drop 10 percent due to the on-going economic downturn, according to analysts from Credit Suisse.
vna
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