Steel import tax rise to help local producers

Steel import tax rise to help local producers

The Ministry of Finance is expected to increase import tax on steel products for the second time this year in a bid to tackle the consumption woes of domestic producers.

Under a ministry's draft circular, import tax on cold rolled stainless steel will be raised to 7 per cent from the current 5 per cent level, while the ministry will also consider raising the import tax on other steel products.

The move was made as the country's largest cold rolled stainless steel producer Posco VST, which supplies 70 per cent of the country's total demand, said it had faced consumption issues due to a rising volume of imported steel in the domestic market.

Despite an import tax hike on the product from zero to 5 per cent early this year, the country still saw more than 45,770 tonnes of rolled stainless steel imported to the country in the first five months.

According to the Viet Nam Steel Association (VSA), the country's total cold rolled stainless steel production output will reach 300,000 tonnes this year while demand is estimated to be lower than 250,000 tonnes.

VSA's general secretary Dinh Huy Tam said the expected import tax hike is rational, adding that besides Posco, other steel producers are also facing challenges due to rising imports while demand is low in the domestic market.

Tam said that the country last year imported 5.1 million tonnes of steel while this year saw 4 million tonnes imported in the first eight months of the year. Scrap steel also reached 2.2 million tonnes in January-August compared with 2.6 million tonnes for the whole of last year.

Due to the rising imports, domestic steel producers sold only 3 million tonnes of steel in the first eight months, down 10 per cent over the same period last year, he said

vietnamnews