The trade companies, that can meet requirements on storage and impurities treatment, will be allowed to import scrap steel, according to VietNamNet.
The Ministries of Trade, Natural Resource and the Environment gathered several days ago in Hanoi to discuss issues relating to scrap steel imports.
Pham Chi Cuong, Chairman of the Vietnam Steel Association (VSA) said ministry officials have come to an agreement that trade companies will be allowed to import scrap steel. The regulation will be legalized in the circular guiding the implementation of provisions 42 and 43 of the Law on Environment Protection ratified by the National Assembly on November 29, 2005.
The regulation, once legalized, will put an end to the prolonged dispute on whether to allow trade companies to import scrap steel.
Management authorities, referring to the provision 42 of the law, insisted that only steel mills which directly use scrap steel as material to serve their production can import scrap steel, while the scrap steel imports by trade companies under the authorization of steel products was not allowed.
In fact, trade companies have recently halted importing scrap steel for fear the imports would not be cleared by customs agencies. The Vietnam Steel Corporation (VSC) once imported 416 tons of scrap steel for its subsidiary, the Thai Nguyen Cast Iron and Steel Company, but the consignment was stuck at customs and only was released after the Thai Nguyen Department for Natural Resource and the Environment sent a document to customs, confirming that the consignment of scrap steel was imported to serve steel production.
The fact that trade companies stopped importing scrap steel has caused a lot of difficulty for ingot steel producers. In 2006, Vietnamese enterprises planned to import 700,000 tons of scrap steel, but only 600,000 tons were imported. The short scrap steel supply resulted in the lack of material for making ingot steel, which serves the steel laminating process, and raised many difficulties for the local steel industry.
The news that trade companies will be allowed to import scrap steel has been applauded by enterprises, hoping this will settle the biggest problem of the local steel industry: the lack of materials for making ingot steel. Cuong, however, said trade companies’ right to import scrap steel of must be legalized soon in order to ensure the normal operation of steel mills.
Steel producers have also proposed the easing of strict regulations on importing old vessels for demolishing. They said that if Vietnam absolutely prohibited old vessel imports, it would not be able to settle the material shortage problem. The best solution is to allow old vessel imports and put the imports under strict supervision.
This year, Vietnam is set to produce 2 million tons of ingot steel, meeting 50 per cent of domestic demand. To generate such an output, the country needs to import some 1.2 million tons of scrap steel, VSA said. (VietNamNet)
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