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Steel competition seen harsher as market faces glut
The competition on the construction steel market will become stronger this year as output outpaces demand, aggravated by the probable increase in steel import, said a deputy minister of industry and trade.
Do Huu Hao said after attending a conference at the Vietnam Steel Corp. (VNSteel) in Hanoi on Monday that the local market would face an oversupply of construction steel. Aware of this situation, many domestic steel producers have been promoting their exports of construction steel to some nearby foreign markets including Laos, Cambodia, and Myanmar, Hao told the Daily on the phone.
Besides, Hao said, some large steel producers in the country have plans to reduce their output of construction steel and scale up production of other types such as steel sheets and rolled steel.
According to the Vietnam Steel Association, the country is expected to consume some 5.8 million tons of steel products this year, an increase of 10% over last year. The steel redundancy appears unavoidable this year as more steel projects have started operations plus the higher volume of steel imports over exports.
In 2009, the country consumed some 5.3 million tons of both construction and industrial steel products, with 4.7 million tons produced locally and 600,000 tons imported from other countries.
The association predicted that prices of construction steel will be stable this year, given ample supply, continued imports, and a high stockpile.
Many domestic producers of cold-rolled steel sheets have expressed their worries about the cheap, cold-rolled steel sheets and construction steel imported from China, Russia and other countries.
Meanwhile, according to the association, the country now has an inventory of some 4.5 million tons of construction steel products.
Pham Chi Cuong, Chairman of the association, told the Daily on Monday that to solve the problem of steel excess, the association had just suggested the Ministry of Science and Technology issue national standards for imported steel products so as to better control the quality of imported steel. He added that the association had also asked customs offices to take stricter measures in fighting trade fraud with regards to imported steel.
In addition, Cuong said, his association has requested that steel importers not be given incentives when taking out loans.
“The association has suggested local banks limit the loans for steel importers so as to help with the consumption of home-made steel products,” he said.
At the conference on Monday, VNSteel General Director Dau Ngoc Hung said his corporation had plans to turn out 2.4 million tons of rolled steel and 1.2 million tons of steel billets, increasing by 5.6% and 28.2% year-on-year respectively, the Vietnam News Agency reports.
* The Vietnam Cement Industry Corporation (Vicem) aims to ship abroad one million tons of cement in 2010 to ease the oversupply on the local market.
Expanding overseas markets is imperative for the local cement industry as local production already met demand last year and is projected to face a surplus of some two million tons this year. VICEM and its members have successfully exported cement products to other countries in Africa, the Middle East, China and Cambodia.
2009 was a tough year for the cement industry which faced rising input costs such as coal and energy and a saturated local market. The industry saw its cement stockpile amounting to over 750,000 tons last year.
VietNamNet, SGT
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