Steelmakers warned not to increase prices

If domestic steel companies continue to raise prices, they risk losing market share, the Viet Nam Steel Association (VSA) has warned.

The association predicts that this year the steel industry will face further challenges from increases in the price of raw materials such as iron ore, coal and power.

The association predicts that this year the steel industry will face further challenges from increases in the price of raw materials such as iron ore, coal and power.

Nguyen Tien Nghi, deputy secretary of the VSA, said if the steel price on the domestic market rose any further, foreign steel would become more competitive.

Nghi said that the steel price had increased by VND200,000 (US$11.2) a tonne since the end of last year.

A tonne of steel on the domestic market without value added tax now cost between VND11.2 million ($622) and VND11.8 million ($662) a tonne, Nghi said.

The price of pig iron on the world market has risen by $20 per tonne in recent days to $490 per tonne, making imports of the raw material more expensive.

Moreover, VAT domestically has increased from 5 per cent to 10 per cent for steel since the beginning of the year.

The association predicts that this year the steel industry will face further challenges from increases in the price of raw materials such as iron ore, coal and power.

Under World Trade Organisation commitment, certain types of Vietnamese steel would no longer receive preferential treatment, Pham Chi Cuong, chairman of the VSA, said.

However, Cuong said that rises in the world steel price would not impact negatively on the country’s development as domestic production would meet a large part of local demand.

The VSA predicts that 5.8 million tonnes of steel will be consumed domestically this year, an increase of 10 per cent over 2009.

Last year, the country consumed 5.3 million tonnes of steel, of which, 4.7 million tonnes were produced in the country and 600,000 tonnes were imported.

VietNamNet/Viet Nam News

Tags: Vietnam steel industry