The Vietnam Steel Corporation (VSC) has announced a price decrease of 200,000 dong per tonne to 11.32 million dong ($665.88) per tonne for coil steel. Other steel mills have also announced the same price decrease.
VietNamNet Bridge – Foreign made steel is being imported into Vietnam in big quantities thanks to the preferential tariff of five percent, which has forced domestic producers to slash sale prices.
This is the first time since August 2009 domestic producers have reduced sale prices after they raised prices continuously before.
A senior executive of the southern branch of VSC said the sale has been going very slowly, even though the high construction season has come. In September 2009, VSC sold 35,000 tonnes in the south, while the stocks have reached 60,000 tonnes. The big stocks and the massive imports have forced domestic steel mills to slash sale prices.
The executive said that with a sale price of 11.1 million dong ($652.94) per tonne, Malaysia sourced steel which enjoys the zero percent tariff is now cheaper by 700,000 dong ($41.17) per tonne in comparison with domestic products.
Some contractors said that they have received offers to sell steel imports from Malaysia, Thailand and Indonesia. However, few contractors intend to use the steel, because the products do not show details about manufacturers.
According to Nguyen Tien Nghi, Deputy Chairman of the Vietnam Steel Association (VSA), in 2008, the imports from ASEAN accounted for less than 12 percent of the total imports, while the figure had raised to 80 percent by the end of September 2009. Nghi said that the average import volume is no less than 30,000 tonnes a month.
Nghi says steel imports are cheaper than domestically made products for three reasons. The imports from ASEAN enjoy the tariff of zero percent. The ingot steel price in the world market has dropped to $480-490 per tonne. Meanwhile, China is witnessing steel oversupply in its market and is trying to increase exports.
Domestic steel producers said that the majority of import steel have been carried to remote areas. A small volume of imported steel has been sold to small retail shops in cities which will be then sold to small construction works.
According to Do Duy Thai, General Director of Pomina, the import steel, though still not favoured by domestic contractors, would still be a rival for domestic producers. Therefore, he said, the producers have slashed sale prices to avoid losing customers
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