Steel prices cut to boost demand

Domestic steel prices suddenly dropped to levels similar to those at the start of the year, said the Viet Nam Steel Association (VSA).

After two months, the price of steel declined by up to VND300,000 (US$14) per tonne, said deputy chairman of VSA Nguyen Tien Nghi.

He added that the steel prices currently stood at between VND15.5 million ($738) and VND16.4 million ($780) per tonne.

Prices of steel ingot in North Africa were at a standstill. Moreover, governments in some Southeast Asia countries had adopted policies to limit inflation, Nghi explained.

Changes in domestic market had prompted prices to drop, he said, adding that many investors had cut investments in construction in response to Government policies to minimise inflation, so demand had decreased since March.

In response, steel companies had to reduce prices to increase market demand, Nghi said.

He also predicted that the price would continue to fall in the following months as the policy had proved effective.

However, he affirmed the decrease would not be significant.

Responding to the views that the Vietnamese steel industry would be affected by the crisis unfolding in Japan, the VSA affirmed that the impact would not be significant as Japan was not a vital partner.

The crisis in Japan would have an insignificant effect on the Vietnamese steel industry, said VSA chairman Pham Chi Cuong.

He affirmed that prices would not increase because the steel that Viet Nam imported from Japan was mainly specialised high quality steel.

Cuong, however, said that due to the quake, steel demand from constructors of Japanese projects in Viet Nam would decline.

In the first two months of the year, Viet Nam consumed more than 900,000 tonnes of steel. Total sales in March were estimated at only 400,000 tonnes, a month-on-month decrease of 75,000 tonnes. — VNS

Tags: Vietnam steel industry, Vietnam steel market, Vietnam steel prices