Global hike heats up Vietnam's steel prices
HANOI - Construction steel prices have continued to skyrocket, reaching all-time highs due to the relentless rise in global prices and Vietnam's overwhelming dependence on imports, according to the steel industry.
Construction steel is selling at VND7.8 million (US$500) per tonne this week, the Vietnam Steel Association (VSA) said. "The hike is due to a continuous rise in international prices since August last year, especially in November and January," VSA vice chairman Pham Tri Cuong said.
He attributed the rise to a surge in demand from China and the recovering US and European economies. Global steel ingot prices rose by $50 in January alone to $420 per tonne, Cuong said.
Last year, Vietnamese demand for ingots was 2.3 million tonnes while domestic production was just 500,000 tonnes. As a result, the country imported 1.8 million tonnes.
Predicting global prices to remain high until October, Cuong said that in an effort to cap domestic prices, four ministries have jointly worked out solutions for government consideration.
The ministries of trade, finance, industry, as well as agriculture and rural development have told the government to boost local ingot production to reduce Vietnam's dependence on imports. The ministries expected local production to rise to 750,000 tonnes this year.
The Ministry of Natural Resources and Environment has meanwhile called for the simplification of steel scrap import procedures, an alternative input in making construction steel.
In another move, the Ministry of Planning and Investment has allowed the wholly Taiwanese-owned company Sun Steel to increase its capital in Vietnam.
Following the infusion, Sun Steel's ninth, the company is set to increase its investment from $67.5 million to $200 million, enabling it to build a new plant in Dong Nai province.
Asia Times - February 07, 2004.
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