Tough times for the steel industry

Businesses in Russia and the Ukraine currently offer the price of steel ingots at US$290 per tonne, US$100 per tonne cheaper than last month, making it very difficult for the domestic steel industry, according to the Vietnam Steel Association (VSA).

Due to the global economic downturn, many foreign steel producers facing a severe lack of demand have started to export steel below cost prices.

In early February, businesses in Russia and the Ukraine sold steel ingots at US$400 per tonne. In early March, the price dropped to US$300 per tonne and now hovers around US$290 per tonne. Enterprises in China and Turkey also sell steel ingots cheaper, which is having a serious impact on the country’s steel producers.

Most Vietnamese steel businesses depends the import of raw materials from abroad, at a price of US$250 per tonne. If they include processing expenditures, the price of steel ingots produced in the country will be very high and they can’t compete with foreign businesses.

According to the VSA, the total capacity of domestic enterprises to produce steel is just 2.7 million tonnes per year but still higher than domestic consumption demand at present.

Additional steel mills will start operating soon to produce a total of 5.55 million tonnes a year. Then, there will be an abundant supply of steel not only for domestic consumption but also for export.

vov

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