9:29:25 AM | 23/10/2008
Series of Vietnamese steel producers have halted production, or reduce capacity as they cannot sell their products, the Nguoi Lao Dong online reported.
Steel consumption in recent time has dropped 60 per cent as compared with first months of the year although steel prices have plummeted over the past two months.
Currently, VIna Kyoei Steel Company sells only 5,000-6,000 tons of steel monthly, compared with 30,000 tons previously. The Vietnam Steel Corporation (Vnsteel) previously sold more than 60,000 tons per month while it sold only 17,000 tons in August, 16,000 tons in September and 11,000 tons in the first 20 days of October. Similarly, Pomina is reducing steel consumption by a half.
In October, Vnsteel has slashed prices of its products twice, by VND2 million/ton in total.
According to steelmakers, they have to cut prices every 10 days and may further slash in the coming time if consumption does not rise again.
At present, Vietnam is housing some 10 steel ingot makers who report a big volume in stock now.
According to the Vietnam Steel Association (VSA), the country has an inventory of 500,000 tons of steel ingots and 360,000 tons of finished steel while the current consumption of finished steel is just 100,000 tons per month.
Five steel enterprises have halted production and many others reduce capacity, the VSA said.
Domestic steel producers said they have incurred losses since July. Vnsteel said with the current price of finished steel it suffers a loss of VND60-70 billion each month while Vina Kyoei faces loss of several millions of USD monthly.
The association has proposed raising import tax on finished steel to 25 per cent from the current 8 per cent to prevent expected massive Chinese steel imports in the coming time.
According to the association, Vietnam imported 28,400 tons of construction steel from China in August and 27,900 tons in September. (Nguoi Lao Dong online)
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