The Vietnam Economic News, a newspaper of the Ministry of Industryand Trade, in a article published on February 19 proposed the steelindustry reorganise its distribution system, improve competitiveness andpromote exports to new markets to achieve growth of 6-7 percent in2014.
Supply far exceeds demand
According to the VietnamSteel Association (VSA), steel production and consumption in the2011-2013 period faced many difficulties due to the imbalance betweensupply and demand.
VSA former Standing Deputy Chairman NguyenTien Nghi said that the construction of many steel plants led tooversupply. In addition, Vietnamese steel businesses had to compete withcheap steel imported from China, while the production capacity of manyenterprises was only 40-50 percent. Steel production and consumption in2013 decreased compared to 2012, forcing businesses to continuedownsizing and cutting production.
VSA Chairman Ho Nghia Dungsaid that production capacity of 13 iron companies was 3.3 milliontonnes, however, volume in 2013 was just over 500,000 tonnes, equal to15-20 percent of capacity. Production capacity of 26 companies in thesteel industry was 9 million tonnes, however, volume was just over 5.2million tonnes, equal to 60 percent of capacity.
The majority ofdomestic steel manufacturing companies have used outdated technology,making the difficulty in competing with imported steel.
Domestic consumption
Commentingon the steel market in 2014, Vietnam Steel Corporation Deputy GeneralDirector Vu Ba On said that this will remain a difficult year and thesteel industry needed to make further efforts. In addition to theoversupply, domestic steel firms have also competed with imported steel,especially cheap one from China. It is necessary to strengthen theadministration, reorganise those businesses that make a loss, andimprove operational efficiency.
VSA Chairman Dung said that steelconsumption in 2014 would not change. Difficulties in production madethe steel industry face difficulties in finding capital and partners forprojects, especially unfinished and key ones. For example, the projectto expand production in the second stage of the Thai Nguyen Iron andSteel Corporation was approved in 2007 with a total investment capitalof 3.8 trillion VND (180 million USD) and projected to test-run in 2011,however, due to slow implementation and the market volatility, such asincreasing raw material prices and fluctuant exchange rate, a totalinvestment capital was proposed to rise to more than 8.1 trillion VND.Arrangements by now are still unresolved.
Key projects in the2015-2025 period such as hot-rolled steel projects with a capacity of 2million tonnes per year of the Vietnam Steel Corporation have also foundno investors.
Looking for new markets
Vietnam hasexported 575,991 tonnes of steel to the Cambodian market with a totalvalue of nearly 393 million USD, an increase of 20.7 percent in volumeand 10.57 percent in value, accounting for 14.6 percent of total exportvalue. Steel is exported through An Giang waterway border gate with lowcosts. Steel produced in the south has effectively competed on pricewith Thai and Chinese steel in the Cambodian market. In addition tothis, three steel production companies, namely Pomina, Tay Do Steel andSunsteel, also export their products to Cambodia.
Vietnameseexports to Myanmar are mainly iron and steel, machinery and spare parts.In particular, iron and steel products accounte for the largest part.Therefore, in 2014, the Vietnam Steel Corporation will continue toreorganise its distribution system, improve competitiveness and boostexports to new markets, such as Cambodia, Indonesia and Myanmar.
VietnamSteel Corporation Chairman Do Duy Thai said that developing markets inthe region is the right choice by Vietnamese steel producers.-VNA
Supply far exceeds demand
According to the VietnamSteel Association (VSA), steel production and consumption in the2011-2013 period faced many difficulties due to the imbalance betweensupply and demand.
VSA former Standing Deputy Chairman NguyenTien Nghi said that the construction of many steel plants led tooversupply. In addition, Vietnamese steel businesses had to compete withcheap steel imported from China, while the production capacity of manyenterprises was only 40-50 percent. Steel production and consumption in2013 decreased compared to 2012, forcing businesses to continuedownsizing and cutting production.
VSA Chairman Ho Nghia Dungsaid that production capacity of 13 iron companies was 3.3 milliontonnes, however, volume in 2013 was just over 500,000 tonnes, equal to15-20 percent of capacity. Production capacity of 26 companies in thesteel industry was 9 million tonnes, however, volume was just over 5.2million tonnes, equal to 60 percent of capacity.
The majority ofdomestic steel manufacturing companies have used outdated technology,making the difficulty in competing with imported steel.
Domestic consumption
Commentingon the steel market in 2014, Vietnam Steel Corporation Deputy GeneralDirector Vu Ba On said that this will remain a difficult year and thesteel industry needed to make further efforts. In addition to theoversupply, domestic steel firms have also competed with imported steel,especially cheap one from China. It is necessary to strengthen theadministration, reorganise those businesses that make a loss, andimprove operational efficiency.
VSA Chairman Dung said that steelconsumption in 2014 would not change. Difficulties in production madethe steel industry face difficulties in finding capital and partners forprojects, especially unfinished and key ones. For example, the projectto expand production in the second stage of the Thai Nguyen Iron andSteel Corporation was approved in 2007 with a total investment capitalof 3.8 trillion VND (180 million USD) and projected to test-run in 2011,however, due to slow implementation and the market volatility, such asincreasing raw material prices and fluctuant exchange rate, a totalinvestment capital was proposed to rise to more than 8.1 trillion VND.Arrangements by now are still unresolved.
Key projects in the2015-2025 period such as hot-rolled steel projects with a capacity of 2million tonnes per year of the Vietnam Steel Corporation have also foundno investors.
Looking for new markets
Vietnam hasexported 575,991 tonnes of steel to the Cambodian market with a totalvalue of nearly 393 million USD, an increase of 20.7 percent in volumeand 10.57 percent in value, accounting for 14.6 percent of total exportvalue. Steel is exported through An Giang waterway border gate with lowcosts. Steel produced in the south has effectively competed on pricewith Thai and Chinese steel in the Cambodian market. In addition tothis, three steel production companies, namely Pomina, Tay Do Steel andSunsteel, also export their products to Cambodia.
Vietnameseexports to Myanmar are mainly iron and steel, machinery and spare parts.In particular, iron and steel products accounte for the largest part.Therefore, in 2014, the Vietnam Steel Corporation will continue toreorganise its distribution system, improve competitiveness and boostexports to new markets, such as Cambodia, Indonesia and Myanmar.
VietnamSteel Corporation Chairman Do Duy Thai said that developing markets inthe region is the right choice by Vietnamese steel producers.-VNA
