Steel inventory presently estimated at nearly 500,000 tonnes
Vietnam Steel Association (VSA) said that the current steel inventory is estimated at nearly 500,000 tonnes while the allowable average stockpiled steel volume is about 250,000 tonnes.
As calculated by VSA, steel firms will have to pay some 150 billion dong per month for this stockpiled steel volume.
The high steel inventory was attributed to the government’s policy on cutting down public investments and suspending the pace of unnecessary projects that eventuated in freeze of the real estate market in 2011.
In addition, the steel industry also faced other difficulties such as capital costs were too high, input material price saw a two-digit increase, coal price surged 41% from early April 2011, gasoline price increased 32-43% and electricity price soared 15.28%. Since early this year, the price of input materials for steel sector such as iron ore, coke, steel billet and scrap steel also increased by 20-30% from 2010.
The reason of this situation that has been mentioned repeatedly in recent years is unreasonable scheme of steel industry. Currently, the country has 32 steel projects outside the plan, including over 20 ones being granted incompetently by localities.
Tags: Vietnam steel industry, Vietnam steel market, Vietnam steel prices