The Ministry of Industry and Trade (MoIT) will apply automatic import licences to some steel products as of September 20 in order to better manage imports, according to MoIT's newly-issued circular.

Steel importers will have to register each lot of steel products with the MoIT 

Steel importers will have to register each lot of steel products they import with the MoIT. Every automatic import licence is valid within 30 days after confirmation by the ministry. The licence will be granted within seven working days for normal applications and five working days for online applications.

The move to enforce import registration was made after reports that a significant steel volume has been imported to the country while steel demand in the domestic market is low and local steel producers face high inventories due to low consumption. It was estimated that roughly 200,000-300,000 tonnes of Chinese steel are imported to the country monthly, mainly to southern provinces.

Meanwhile, according to the Vietnam Steel Association, the domestic steel market has not showed signs of recovery for the past several months and consumption demands also remain low. The country's steel output in July was 506,200 tonnes, while steel consumption in the same month was only 351,000 tonnes.

Domestic steel producers said that they had to cut output to avoid having too much inventory. But some steel products still had a surplus of up to 40 per cent in the first six months of 2012.

Le Phu Hung, general director of the Vietnam Steel Corporation, said the corporation's July output decreased 13 percent from the previous month and many plants had to stop production several days early.

Hung said that his corporation found it difficult to sell products, even though it cut its sale price by VND300-900 per kilogramme.

Hung admitted that consumption of Vietnam-made steel was low, and that domestically produced steel was less competitive than imported products due to high input costs.

MoIT forecast that steel demand in the last months of the third quarter would not increase. However, it recommended domestic steel producers seize the opportunity to boost consumption in the last quarter of the year as the Government has planned to increase public investment in the industry this year.