The Vietnam Steel Association has forecast that the steel industry will grow at 12 per cent this year. ( Photo vinaonesteel.com) Several local steel producers have set lowergrowth targets this year after a rosy 2016 that enjoyed an improved domesticeconomy, higher steel prices and application of anti-dumping duties on Chinesesteel.
Nguyen Van Sua, Vice President of the VietnamSteel Association (VSA), said that it was necessary for local producers to becautious about business targets this year because supportive factors were notas good as last year.
Sua said that the association has forecast asales growth of 12 percent this year, lower than last year’s 17 percent.
Tran Dinh Long, Chairman of the Hoa Phat Group,a leading steel producer in the country, was quoted by enternews.vn assaying that the industry would continue to be fuelled by the recovery of theproperty market until 2018.
The Hoa Sen Group has also set lower grossprofit growth target at 10 percent respectively for 2017, after a 130 percentgrowth rate last year.
Nguyen Ngoc Anh, chairman of steel distributionfirm SMC Trading Investment Joint Stock Company, which has set its 2017after-tax profit target at nearly half of last year, said that the local steelindustry was still heavily dependent on global prices.
“Steel prices are on a downward trend, so localproducers should be cautious,” Anh said.
According to the VSA, the price of constructionsteel in the local market has dropped by around 600-800 VND per kilogram in thefirst quarter of this year and that of iron ore is forecast to dropto around 74 USD per tonne by June from 80.9 USD atthe end of March. Scrap steel is also on a downward trend at around 265-270 USDper tonne at present from 315 USD in 2016.
The association said that the drops in pricewere caused by the letting out of inventories as well as competition amongproducers to maintain their market share.
Sua said that steel exports would continue tostruggle in 2017 due to pressure from the investigation and application oftrade defense instruments by import markets.
Many countries were enhancing application oftrade defense instruments against Vietnamese steel, he said.
Statistics compiled by the Vietnam Chamber ofCommerce and Industry (VCCI) show that by the end of July 2016, out of 100anti-dumping lawsuits, 20 related to the steel industry.
The Vietnam Steel Corporation has advised localproducers to enhance competitiveness by improving production efficiency as wellas market analysis.
It has also called on the Government to issuepolicies to prevent mass inflow of cheap steel, especially from China, as wellas trade fraud.
In the first quarter of this year, steel outputreached 4.6 million tonnes, up 18.8 percent over the same period last year.Sales rose 6.5 percent during this period to reach 3.76 million tones.
Vietnam imported finished steel productstotalling 3.56 million tonnes worth 2.2 billion USD in the first quarter,up 13 percent and 64 percent year-on-year, respectively.-VNA
VNA
