| Steel price rises again |
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(Listed Jul 3, 2008) |
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 Many steel retail outlets in HCMC yesterday said the steel price of some manufacturers such as VinaKyoel and Pomina will possibly increase by VND1 million to VND1.3 million per ton since today.
The steel retail outlets in the city said they have just received the announcement for a hike in steel price again from the manufacturers just days after a price hike of some VND1 million per ton early last week.
As observed by the Daily yesterday at some steel retail outlets in the city, the price of steel amounted to some VND18.9 million per ton.
A female employee at Song Dao outlet on Ly Thuong Kiet Street in District 11, who is only known as Khue, told the Daily yesterday that the price of steel from most manufacturers rather than Pomina and Vinakyoel only would increase today.
The increase will definitely place more hardship on contractors in the city.
However, according to steel producers, the increase by some VND1 million per ton will still not offset the increasing production costs at the moment because the import price of steel ingots has gone up much higher than before.
Pham Chi Cuong, chaiman of Vietnam Steel Association (VAS), said that the Vietnam Steel Corporation has just received an offer of ingots from Turkey at some US$1,300 per ton, an increase by some US$40 per ton compared to a similar offer on June 23. The increase of import price of steel ingots has upset many steel producers in the country who are reluctant to import ingots for their production at the time being.
Cuong said that the country now has only some 400,000 tons of steel material in stock, enough for steel production for over a month only. Cuong warned that if steel ingot producers in the country continue to export large amounts of materials, the country's steel industry will face huge problems in the rest of the year.
Although the Ministry of Finance has raised the export tariff on steel ingots to 10% from 2% applicable from June 28 as a measure to check the increasing export of steel ingot, many producers in the country will continue shipping abroad some 100,000 more tons of ingots in July on signed contracts as a way to have enough money to maintain their productions.
According to the steel association, in the first six months of the year, domestic ingot producers have exported some 110,000 tons of materials.
Both producers and the Government realized that the increasing export of steel ingots would undermine the country's steel industry in the near future because Vietnam is a net importer of steel materials, importing some 60% of its ingot demand each year. Currently, the export price of steel ingots is some US$1,100 per ton while the domestic price is only some US$970.
Do Duy Thai, general director of Thep Viet Company, said that the company has two subsidiaries namely Phu My and Pomina, which have a combined production capacity of500,000 tons of ingots and 600,000 tons of finished steel products per year. However, Thai said the company had no way but export the ingots to solve the financial difficulty at the moment.
Nguyen Thanh Bien, Deputy Minister of Industry and Trade, told the Daily yesterday that the higher export tariff on steel ingots at 10% seemed not to be strong enough to stop the increasing export of steel materials because the wide price differential between the local market and the global market.
Bien said the ministry is discussing with the Ministry of Finance for a series of measures to control the ingots export.
"It's possible that the ministries will consider another tariff raise on steel ingots," Bien said.
Source: Saigon Times |
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