New trade pacts mean steel will see hard times

Apr 10th at 13:38
10-04-2015 13:38:44+07:00

New trade pacts mean steel will see hard times

The domestic steel sector would face difficulties due to fierce competition from imported steel, and the sharply reduced taxes levied on such imports, the Ministry of Industry and Trade said.

 

A report from the ministry's Industry and Trade Information Centre showed that when bilateral and multilateral trade pacts come into effect, the industry would be under greater pressure from countries, which will be at a greater advantage, such as South Korea, Russia and Belarus.

In addition, several new production lines, including Vinakyoei, Posco SS and Formosa, would also ramp up competition in the sector.

The Finance Ministry had promulgated a circular 161/2011/TT-BTC that took effect at the beginning of this year, and relates to the preferential import taxes that will be levied following the implementation of the ASEAN Agreement on Trade in Goods for 2015 to 2018 period.

As per the circular, the import taxes levied on steel, iron ore and alloy imports will be zero per cent.

The report said the sharp tax cuts would create both opportunities and challenges for Vietnamese firms.

The Viet Nam Steel Association (VSA) had said last year that imported steel was up 11 million tonnes, reflecting a 105 per cent year-on-year jump.

Of this, 4.78 million tonnes was imported rolled steel, containing 0.0008 per cent boron (Bo) element, and was labelled as metal in order to enjoy the preferential tax of zero per cent.

The steel was sold in the market at a price, which was VND1 to 2 million per tonne lower than the price of domestic steel.

It was because of this reason that several local steel plants had to cut capacity by up to 60 per cent or face dissolution.

The ministry said domestic steel consumption during the first two months of the year touched 300,000 tonnes, slipping 30 per cent over the same period last year.

Construction steel consumption, including exports during the two month period was 645,204 tonnes, representing a 7 per cent year-on-year increase.

It also forecast that the market would improve in the second quarter, but would see prices unchanged due to oversupply and increased imports.

VSA said the country's steel consumption this year would jump 8 per cent or 6 million tonnes. However, steel output in the country has been pegged at 11 million tonnes, which is double the demand, thus further pressuring domestic producers.

The Trade Information Centre said the Government should allow private steel companies to take part in an auction for State-invested construction in order to facilitate the development of the industry. 

bizhub



NEWS SAME CATEGORY

VN's supporting industry goes to Europe

A business delegation flew to Austria to participate in a workshop on attracting investment for Viet Nam's supporting industries on Wednesday.

Gazprom to acquire 49% stake in Dung Quat oil refinery

Gazprom Neft (Russia) plans to buy a 49% stake of the Dung Quat oil refinery and expand cooperation with Petro Vietnam in the production and exploration of oil and...

Foreign investors scampering for a share in garment industry

A series of foreign direct investment projects in the garment sector will be started in the central region of Vietnam over the next months.

City to meet dry season power needs

The HCM City Electricity Corporation has promised to ensure an adequate power supply and fewer power cuts during the dry season.

Vietnam automotive industry to grow fastest in ASEAN: Thai industry insider

Vietnam’s automotive industry will enjoy the fastest growth in Southeast Asia in the next 20 years because of rising demand and help from the government, Vichai...

Mechanics sector must improve

The domestic mechanical engineering sector needs to change dramatically to become one of the "spearhead" industries designated by the Government, insiders have said.

Investors expected to stay with petrochemistry projects despite oil price drop

Most of the planned petrochemistry and oil refinery projects have not been implemented as initially scheduled, but experts still think the projects deserve...

Support industry needed to amp up production

Viet Nam should boost the development of support industries to improve the production chain for multinational corporations, as it can meet a modest portion of local...

Many plants to join power wholesale market

The competitive power wholesale market will be kicked off early next year following an approved road map and power plants to join the market are forecast to...

Ministry says bauxite projects likely to incur initial losses

The two bauxite mining and processing projects in the Central Highlands Province of Lam Dong, which became operational in October 2013, would incur losses for four...


MOST READ


Back To Top