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Steel producer reverses decision to raise prices
A major local steel producer, Vientiane Industry Co., Ltd, has cancelled plans to increase the price of steel this week despite rising oil costs worldwide.
Higher fuel costs drove a decision to hold on further import of raw materials for the time being.
“We have cancelled plans to raise steel prices because currently we still have raw materials for production in supply,” Mr. Sonesavanh Soukdala, a senior official at the company, said yesterday.
Currently the company, based in Hadxaifong district, supplies standard steel at a cost of about 7.7 million kip per tonne and sells to dealers in Vientiane.
The price has been in effect since early last year following approval by the Industry and Commerce Ministry.
The company will extend the current price until raw m aterials are reordered. “By that time the steel price will have changed, depending on the costs of new raw materials,” Mr. Sonesavanh said.
Last November the company imported raw steel materials known as billet for US$500 to US$600 per tonne and plans to order another batch soon. However, billet prices have increased in tandem with global oil costs.
“The billet is now at a cost of US$700 per tonne,” he said. The Cement Producers Group also maintained cement prices at their current level.
The group has been selling at these prices since May of last year.
“We will maintain prices until end of next month. At the moment we are not concerned about how much costs of fuel will rise,” said group Secretary Inpone Phathananoulack.
Prices will be kept steady in observation of important national events, including the Ninth Congress of the Lao People's Revolutionary Party this month and general election of the National Assembly's 7th Legislature next month.
“We will have a discussion on price adjustment again after April,” Mr. Inpone said.
The current price of ‘green' brand cement is 680,000 to 710,000 kip per tonne and ‘red' brand cement is 750,000 to 780,000 kip per tonne.
Other steel producers have adjusted prices upwards to compensate for the high cost of fuel.
Silimungkhoun Steel Industry Factory, a major steel producer in the Xaythany district special industrial zone, sold steel for about 6 million kip per tonne early last month but has recently had to raise prices.
Owner Thaithavy Silimungkhoun said he has to adjust prices because both production and transport costs are affected by rising fuel costs.
Last week's rise in fuel, the sharpest in weeks, is expected to have further impact on business and industry.
In Laos, petrol stations are now selling premium petrol from 11,370 to 11,500 kip per litre, regular petrol from 10,250 to 10,550 kip per litre and diesel from 9,120 to 9,440 kip per litre.
Prices reflect rises of between 310 and 350 kip per litre, depending on shifts in the global market.
It was the fifth fuel price adjustment this year, all of which have been increases. Last year, there were 14 adjustments, 10 of them increases. That followed 15 adjustments in 2009, of which 11 were increases.
The Lao Petroleum and Gas Association reported that fuel consumption in Laos is expected to rise to more than 750 million litres this year. Consumption increases about 7 to 10 percent each year.
vientiane times
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