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Excessive steel production a hazard to market, association warns
The steel industry will face problems of overproduction in the future, the Vietnam Steel Association (VSA) has warned, citing the uncontrolled granting of licenses to new steel projects.
Under the sector’s steel production development plan, its total capacity will be 20 million tons per year by 2025, but as of now, the industry is due to produce 40 million tons, since many steel projects have been licensed without restraint in several provinces and cities, the VSA said.
According to VSA statistics, 32 steel projects outside the sector’s plan have been granted investment certificates, with 5 in Hai Phong City, 4 in Thanh Hoa and Hai Duong Provinces, and 3 in Ha Tinh Province.
In Ba Ria-Vung Tau Province alone, 17 steel projects with total capacity of 13.75 million tons per year have been registered. That means the province has seven projects in excess of the limit, the VSA said.
To prevent the overproduction of steel that would cause waste and destabilize the market, the VAS has recently submitted a report to the Government asking for measures to prevent the uncontrolled licensing of steel projects.
Meanwhile, some businesses have proposed that the Government take action to safeguard domestic steel manufacturers against the domination of imported steel products.
In the first four months of the year, the country saw 1.75 million tons of various types of steel imported, of which many may be produced domestically, according to the VSA.
Under the pressure from imported steel, many domestic steel companies have already had to reduce prices five times this year. Currently, prices of coil and rod steel are around VND12.54 million (US$660) and VND13.14 million per ton respectively, the VSA said.
Lac Phong – Quang Minh
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