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Steel faces stiff competition abroad
Domestic steel sales increased in February, but domestic makers are facing stiff competition from regional steel manufacturers.
Domestic steel producers sold a total of 230,000-240,000 tonnes of steel in February, an increase over January’s 175,000 tonnes, but the figure was still lower than the sector’s average of 300,000 tonnes per month, which producers have come to rely on.
Steel sales usually spike in the first two months of the year as builders scramble to prepare for construction season, which begins in March. But this sales had a slow start.
Le Van Thanh, deputy general director of the Vietnam-Australia Steel Company (Vinausteel), said that producers expect steel sales to see a remarkable increase this month thanks to the start of building season and Government stimulus plans.
In addition to steel imported from China, domestic steel makers must compete with imports from other ASEAN countries, Russia and the Republic of Korea (RoK).
Pham Chi Cuong, chairman of the Vietnam Steel Association (VSA), said that starting in February, imports of rolled steel from the ASEAN region to the southern provinces increased due to slow sales in other countries.
Domestic rolled steel products have had severe competition from ASEAN steel products because, with zero import tax, the price of imported products is often cheaper than domestic ones, Cuong said.
The price per tonne of regional steel is 500,000 VND lower than the price of domestic products. The retail price of domestic steel is currently at 10-10.5 million per tonne, according to the VSA, excluding value added tax and transport fees.
Steel products from Russia and the RoK are more expensive than those fom ASEAN, but still cheaper than domestic steel products. Customers are willing to pay a little more for Russian and RoK products because of their high quality.
Cuong said so far, 100,000 tonnes of steel have been imported to Vietnam from those markets.
Vietnamplus
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