Vietnamese steel companies see improving production

The Vietnam Steel Association said that production and sales of its members have significantly improved thanks to recovering real estate market.
 
Particularly, in the first half of this year, steel production reached 6.45 million tons, up 18.6 percent compared to the same period last year; the sales of steel hit 5.46 million tons, up 22.2 percent over the same period last year; and steel exports touched 846,000 tons, down 4.7 percent.
 
Despite increase in production, domestic steel industry still faces difficulties due to excessive steel supply. The prices of domestic steel products have continuously dropped in accordance with losing trend of input materials. Most steel products have seen a decline of 5-10 percent in price in comparison to the beginning of this year.
 
According to VSA, economic growth of China - the world’s largest market that controls global steel industry’s movements – has become stagnant, causing steel consumption to reduce while steel production of China is always in great abundance. Therefore, China will promote export of steel to other countries, including Vietnam, at low prices, causing pressure on local steel companies.
 
Moreover, competition among local companies and that between local and foreign steel companies have become more cutthroat because of free trade agreements which send steel import tariffs from many countries to Vietnam to zero percent. As a result, domestic steel companies have to lower their prices to maintain operation.

By Lac Phong – Translated by Thuy Doan

Other news