HCMC – After several months, big steel enterprises have finally decided to lower the steel price by VND200,000-300,000 per ton from this week to boost the consumption, bring down the inventories and avoid the interrupted production.
Steel price starts to drop
By Van Nam - The Saigon Times Daily
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| The rolled steel kept in the stock of Vina Kyoei Steel Co. - Photo: Van Nam |
HCMC – After several months, big steel enterprises have finally decided to lower the steel price by VND200,000-300,000 per ton from this week to boost the consumption, bring down the inventories and avoid the interrupted production.
Pham Chi Cuong, chairman of the Vietnam Steel Association (VSA) told the Daily on Monday that Hoa Phat, Thai Nguyen, Vina Kyoei, Thep Viet and Southern Steel have announced to reduce the price by over VND200,000 for each ton.
According to Cuong, the steel ex-factory price of big firms only fluctuates around VND15 million per ton, exclusive of VAT, which has dropped much from the price of VND15.3 million last month.
“A reason for the steel price drop is a reduction of US$15-20 per ton in price of imported input materials such as steel billet or scrap,” Cuong said.
The steel consumption last month was quite low with only around 350,000 tons, and thus enterprises have then considered lowering the price.
Besides, the steel inventories until May 31 had amounted to 315,000 tons, and many plants have had to stop operations or just produced a small amount of steel billet, he said.
According to VSA, the total steel production capacity is now too high with up to 9.2 million tons of designed capacity per year. Meanwhile, the forecast consumption nationwide this year will only reach nearly six million tons.
VSA has for many times warned of the huge supply compared to the demand in the steel industry. However, localities have still licensed many large-scale steel projects recently.
Vina Kyoei Steel Co. last Friday started work on a new plant which will have a production output of 500,000 tons per year and go into operation in June, 2014. In addition, according to VSA, Posco Special Steel Vietnam late this month will construct a plant worth US$620 million with an annual capacity of one million tons in Phu My 1 Industrial Park, Ba Ria-Vung Tau Province.