Steel imports menace local industry

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Iron and steel volume imported into the country totaled around 6.2 million tons worth nearly US$4.5 billion in this year’s January-August, rising by 24.7% and 10% year-on-year respectively, according to the General Statistics Office.

In the meantime, January-August iron and steel exports by local enterprises only posted a combined 1.5 million tons worth around US$1.2 billion, resulting in a trade deficit of up to US$3.3 billion for the industry in the period.

Total construction steel capacity reaches 11.3 million tons now, the Vietnam Steel Association (VSA) reports.

Apart from many enterprises that are still building factories and scaling down or halting operation, others with total capacity of 7.5 million tons annually have to compete fiercely due to local oversupply, not to mention the massive imports of low-priced steel products. The association therefore predicts this year’s building steel sale volume at only roughly five million tons, up 3-5% versus last year.

Nguyen Tien Nghi, vice chairman of VSA, informed that his association at a meeting with leaders of the Ministry of Industry and Trade on Tuesday again proposed the ministry have policies to help the industry find outlets to cut inventories.

VSA also suggested adopting solutions to tighten control over the rising imports of Chinese steel containing boron alloy that enjoys low import tariffs, which has cut into market share of local enterprises.

The industry ministry’s leaders at the meeting responded that it and the Ministry of Science and Technology would issue a joint circular on management of imported steel products within this month, Nghi said.

In a petition sent to Deputy Prime Minister Hoang Trung Hai at the end of July, VSA noticed lots of Chinese companies had mixed boron with steel items to enjoy tax incentives. Chinese companies only mixed the chemical element with cold-rolled steel at first but they have now done the same thing with hot-rolled steel and hot-rolled steel sheets, competing directly with local products, according to VSA.

The massive boron-contained steel imports from China with the current oversupply at home have left negative impacts on industry players.