Industrial skid marks a four-year low

Vietnam Steel Association forecast a 12 per cent growth for Vietnam’s steel sector in 2017-Photo: Dung Minh

Le Thuy Trung, vice head of the Ministry of Planning and Investment’s Department for Industrial Economics (DIE), told VIR that the country’s four-month index for industrial production (IIP) climbed only 5.1 per cent, far lower than that in the corresponding periods of 2016 (7.4 per cent), 2015 (9.4 per cent), and 2014 (5.4 per cent).

In April, IIP went up by 7.4 per cent, still lower than the 7.9 per cent of the same period last year.

According to the DIE, the main causes behind this include a year-on-year drop of 9.7 per cent in the mineral sector’s output value for the year’s first four months, as well as a 13.1 per cent decline in coal production, a 1.6 per cent fall in mobile phones, and a 2.2 per cent reduction in leather footwear.

Other industrial sectors also witnessed year-on-year reductions in the year’s first four months, such as the manufacturing sector (0.4 per cent), the electricity production and distribution sector (2.8 per cent), and the wastewater and rubbish treatment sector (2.7 per cent).

State-run PetroVietnam reported that in April, the group’s crude oil and gas output hit about 1.3 million tonnes, down 4 per cent month-on-month and 11 per cent year-on-year.

In the year’s first four months, the group’s total crude oil output hit about 5.25 million tonnes, down 12.9 per cent – 780,000 tonnes – year-on-year.

The crude oil price in the first four months averaged $56 per barrel, higher than the $37.40 per barrel average of the same period last year.

In addition, the domestic coal sector also witnessed a freefall in production, according to the DIE.

The DIE reported that April saw the nationwide production of nearly 3.67 million tonnes of clean coal, down 10.8 per cent against March, and down 13.1 per cent year-on-year.

State-run mining giant Vinacomin reported that in April, it exploited 3.55 million tonnes of green coal, equal to merely 9.9 per cent of the yearly plan. The group’s coal sales totalled about 3.61 million tonnes, hitting only 10 per cent of the yearly plan.

Also, Vinacomin’s total revenue from coal sales in April hit VND6.38 trillion ($289.8 million), equivalent to 11.7 per cent of the yearly plan.

In the year’s first four months, the group produced 12.86 million tonnes of green coal, down 5 per cent year-on-year. The group’s clean coal output was 11.88 million tonnes, the same as last year’s corresponding period.

“All the figures show that local production remains feeble. You can also see this in the inventory index in many sectors,” Trung said.

The DIE reported that the inventory index of Vietnam on April 1 in the manufacturing sector rose 12.7 per cent, higher than the 8.9 per cent of the corresponding period in 2016.

Many sectors had a high inventory index including engined vehicles (up 58.9 per cent), metal production (up 54.5 per cent), beverage (up 45.4 per cent), cement production (up 39.7 per cent), and paper (up 30 per cent).