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Steel prices feel pressure
Steel prices are expected to increase soon, driven by rising costs of pig iron on the world market.
Pig iron has gone up by more than US$20 per tonne and the import tax has also increased by 3 per cent, according to the Viet Nam Steel Association.
Demand for steel is also reviving from the recent economic slump, and driven in part by the Government stimulus package which increased credit for many construction projects, the association said.
Steel company representatives also point to a rise in other input costs. Fuel costs have caused the cost of manufacturing a single tonne of steel to rise by VND60,000 ($3.3) per tonne, said Dao Dinh Dong, head of marketing for the Southern Steel Corporation.
Representatives of Thai Nguyen Cast Iron and Steel Co have also affirmed that they would soon be forced to increase prices. But the steel association hopes to keep a lid on any large increases in order to stave off a wave of lower-cost imports.
According to the association, the price of rolled steel is now beteen VND10.6 million ($580) and VND10.8 million ($600) per tonne, while the price of steel rods was running betweenVND10.9 million ($605) and VND11.3 million ($627).
All of these prices were already VND500,000-700,000 ($27-38) per tonne higher than the cost of steel imported from Southeast Asia countries.
If the price of Vietnamese steel were to go up any further, its competitiveness could be undercut on the domestic market, warned association chairman Pham Chi Cuong. He also urged authorities to strictly examine import steel, as only imported steel with 40 per cent localisation rate was eligible for tariff preferences.
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