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Vietnam set for steel surplus
A forecast surplus of steel in Vietnam has left the future of many planned new steel-making plants in limbo.
A source from the construction ministry said the nation’s demand for steel may rise to 6.5 million tons next year, far less than the expected output of more than 10 million tons in 2010 and 15 million tons in 2015 from Vietnam’s existing three steel-making plants.
However, over the past few years authorities have approved the construction of 23 new steel manufacturing plants, each worth at least US$500 million.
The forecast steel surplus has resulted in many of the investors of the proposed new steel plants indicating they may cancel or modify their plans.
So far, construction of four steel producing projects has been delayed, including the $1 billion Tycoons Steel International and the Chinese-backed Guang Lian Steel in the central province of Quang Ngai.
Construction of a proposed $527 million Vietnamese-backed project in the southern province of Ba Ria Vung Tau has been at a standstill since being given the green light in 2007.
The Ba Ria Vung Tau provincial government canceled the investment license of the $700 million Taiwanese-backed Thien Hung steel project, granted in 2005, in 2008 after losing patience with the slow progress being made.
The government is reportedly working on a national master plan for future steel production.
Despite the surplus of construction steel, high-technology steel needed to manufacture automobiles and engines has never been manufactured in Vietnam.
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