Massive Chinese steel imports cause more pressure for domestic firms
The massive import of low-priced steel has created more difficulties for domestic steel procedures which currently face high inventory.
According to the General Department of Customs, in the first eight months of this year, Vietnam imported nearly five million tonnes of different kinds of steel, up 2% against the same period of last year. Of the sum, Chinese steel import accounted for 1.4 million tonnes.
Between January and August, the import of China’s rolled building steel reached 156,000 tonnes, up 557% over same period last year of just 35,000 tonnes.
Nguyen Manh Ha, Chairman of Tien Len Steel Group, said Chinese steel prices have fallen to the record low levels, leading to the import increase into Vietnam. Currently, rolled building steel price are at over USD490 per tonne compared to around USD600 per tonne in the local market.
Meanwhile, the Vietnam Steel Association (VSA) said by the end of September, Vietnamese total steel inventories reached 330,000 tonnes.
Nguyen Tien Nghi, Vice Chairman of the association, said the Chinese steel imports were becoming a thorny issue for the Vietnamese steel sector. Chinese steel manufacturers produce steel alloy which benefits from free import taxes among ASEAN countries. This sensible manufacturing technique has caused difficulties for Vietnamese authorities.
After being imported into Vietnam, Chinese steel is sold at prices much lower than domestic products, affecting local manufacturers. Chinese steel products are mainly sold in rural areas.
Many companies said that they imported Chinese steel to produce welding rods, but in fact, sold it for construction works. “The country only needs around 2,000 tonnes of steel alloy for welding rods, but imported figures have climbed to hundreds of thousands of tonnes,” said an official from a domestic steel producer.
Kinh Te Do Thi Newspaper cited VSA as saying that despite being aware of the issue Vietnamese authorities have not yet worked out any solution to deal with this because they have to conform to ASEAN-China free trade commitments.
Nghi said authorities should take drastic actions to control the content of imported steel content, purpose of the imports and labelling regulations to protect local producers.
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