Chinese construction steel rampant in VN, under alloy disguise
Chinese construction steel rampant in VN, under alloy disguise
Local steel makers are lamenting on an unhealthy competition in which Chinese construction steels are imported to the country en masse under the name of alloy steel.
Alloy steel is steel that is alloyed with a variety of elements that account for at least 0.0008 percent of the total weight to improve its mechanical properties.
With local steel makers remaining unable to produce alloy steel, the product is subject to a zero import tax to encourage imports, which paves the wave for many local steel importers to reduce importing costs while raking in bigger profits.
The import duties for other type of steels range from 5 percent to 18 percent.
The Chinese construction steel is alloyed with 0.0008 percent of Boron, an amount enough to have the products labeled as alloy steel even though their mechanical properties are completely unchanged from construction steel.
For that reason, Vietnam imported as many as 270,000 tons of Boron-alloyed cold rolled steel from China in the first five months of this year, even more than the total imports of Chinese cold rolled steel last year, according to figures from the Vietnam Steel Association.
“The increased imports are because importers have taken advantage of the tax break for alloy steel,” VSA deputy chairman Nguyen Tien Nghi told Tuoi Tre.
Tran Tuan Duong, CEO of Hoa Phat Group, said the Chinese alloy steel exporters are also allowed to get a 9 percent value-added tax refund from their government when they ship the products to overseas markets.
The tax incentives from both sides help the Chinese alloy steel to be VND1 million per ton cheaper than the locally manufactured products, Duong said.
“This has indeed burdened local steel makers,” he said.
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