Pleasing steel mills, MOF plans to raise import tariffs
11-10-2012 00:44:30+07:00
Pleasing steel mills, MOF plans to raise import tariffs
The Ministry of Finance MOF is considering raising the import tariffs on some steel products, following the repeated complaints from domestic steel manufacturers about the massive low quality imports.
On its website, MOF on October 8 showed the draft circular on the import and export tariffs, with the tentative tax increase from 5 percent to 7 percent on cold rolled stainless steel products, according to Thoi bao Kinh te Saigon.
Posco VST, the biggest cold rolled stainless steel mill in Vietnam which satisfies 70 percent of the domestic market, some days ago complained that its sales have been going very slowly.
Posco VST also said that it is facing too many difficulties when having to maintain the low sale prices to compete with the products distributed by import companies which bear the tax rate of five percent.
Since January 1, 2012, the import tariff on stainless steel rose from zero to five percent. However, a big volume of stainless steel was imported to Vietnam in the first five months of the year already, estimated at 45,773 tons, a slight decrease of 11 percent over the same period of the last year.
Therefore, the steel manufacturer insisted on the increase of the import tariff on cold rolled stainless steel products from five to 10 percent in order to help the company maintain its market share in the current difficult circumstances.
Despite the five percent tariff, the products still can be imported at low cost prices which would allow the products to dominate the domestic market.
Dinh Huy Tam, Secretary General of the Vietnam Steel Association (VSA) said on Thoi bao Kinh te Saigon on October 8 that not only Posco VST, but other steel mills are facing big difficulties due to the slow sales, partially because of the massive imports, including the low quality imports.
Therefore, Tam said the import tariff increase, if it comes true, would be applauded by domestic steel mills.
Also according to Tam, in the whole year of 2011, Vietnam imported 5.1 million tons of finished steel products. Meanwhile, it imported four million tons in the first eight months of the year alone.
In 2011, Vietnam imported 2.6 million tons of scrap steel, while the figure was 2.2 million tons in the first eight months of 2012.
The massive imports have made domestic steel mills suffer. In the first eight months of 2012, the member companies of the Vietnam Steel association could sell 3 million tons of steel only; a 10 percent decrease in comparison with the same period of the last year.
Cold rolled stainless steel (code 430) is selling at 1504 dollars per ton on the domestic market, while code 304 at 2770 dollars. The prices of import products are 1400 dollars and 2650 dollars per ton, respectively.
As such, if raising the import tariff to seven percent, the new steel prices would be 1428dollars and 2703 dollars per ton, respectively. Meanwhile, the prices would climb to 1470 and 2783 dollars if the import tariff is raised to 10 percent.
Not only insisting on the higher import tariffs, domestic steel mills have urged the government to install technical barriers to restrict the steel imports.
Dau tu has quoted Posco-South Asia Hanoi, the representative for the investment projects of Posco group in Vietnam, as saying that the group has proposed to install non-tariff barriers against steel imports.
The chief representative of the office An Sung Gu said Thailand, Indonesia and Malaysia have all installed non-tariff barriers against the imports from Vietnam, requiring very complicated procedures from exporters with an aim to protect local production.
Meanwhile, steel imports have been flowing to Vietnam very easily, including low quality products, which would kill the domestic steel industry.
vietnamnet
