This ingot steel mill is reducing its production to below 50% capacity. This situation is repeated among several domestic steel companies, since ingot steel prices for imports from China have continuously dropped.
"If ingot steel imports remain this cheap, businesses would rather import products than make them domestically. And if so, Vietnamese steel production would come to rely on ingot steel imports, which could mean more unstable prices." - DO TRUNG KIEN, Deputy General Chairman, Thai Nguyen Iron and Steel Company.
According to the Vietnam Steel Association, the price of steel billets imported from China is around 300 USD per tonne, while production costs for each tonne of steel billet produced domestically can reach up to 400 USD. Four domestic steel mills with support from 25 businesses have submitted a proposal to the Ministry of Industry and Trade to implement a temporary barrier for steel billets and other products.
"The import tax hike on billets is necessary, otherwise Vietnam’s steel makers will face bankruptcy. We can’t have a monopoly in the steel industry because we have to comply with both Vietnamese law and international conventions." - NGUYEN VAN SUA, Vice Chairman, Vietnam Steel Association.
The Ministry of Industry and trade has decided to apply the additional tariffs on imported steel products after more than two months of investigation. The new tariffs, set at 23.3 percent for steel billets and 14.2 percent for steel rods, will take effect from March 22 and end as late as October 7. This gives Vietnamese steel producers more time to increase their competitive ability with imported steel. However, in the long run, the steel industry needs to restructure to adapt to the more competitive realities of international integration.
