Illustrative image (Photo: VNA) Hanoi (VNS/VNA) - Soaring raw material prices coupled with delays inshipping due to the COVID-19 pandemic significantly pushed up steel pricesrecently, according to the Ministry of Industry and Trade.
The price of steel in the domestic market increased by up to 45 percent inrecent months. The ministry’s Industry Agency said that the input costs of thesteel industry largely depended on the prices of raw materials in the globalmarket which has seen whopping increases recently.
Vietnam was reliant on imported raw materials for steel production, includingiron ore, scrap steel, fat coal and graphite electrodes.
It was predicted that Vietnam would have to continue importing many types ofraw materials for steel production this year with more than 18 million tonnesof iron ore, 6 - 6.5 million tonnes of scrap steel, 6.5 million tonnes of fatcoal and 10,000 tonnes of graphite electrode.
The prices of these raw materials were predicted to remain at high levels,which would directly affect steel production in the domestic market. The steelsector was expected to run a trade deficit this year, after a deficit of morethan 6.4 billion USD in 2020.
The agency also pointed out that delays in shipping due to the impacts of theCOVID-19 pandemic also pushed up steel production costs.
In response, the Ministry of Industry and Trade proposed to the Governmentpolicies to stabilise domestic steel supply and demand.
Specifically, the ministry proposed that the import taxes on some steelproducts which saw huge increases in prices should be put under consideration.
The Ministry of Construction was urged to provide forecasts about steel demandthis year to ensure a balance with the supply in the domestic market and forexports, which would serve as a basis for steel producers to be active inraising their production plans and increase efficiency.
For the long term, the Ministry of Industry and Trade would increase theapplication of trade defence instruments to promote the development of domesticsteel producers and to meet the steel demand for the domestic market andexport.
In an effort to promote domestic steel production, the Ministry of Industry andTrade urged the Government to introduce incentive policies to attractinvestment in new production or production expansion, especially in theproduction of hot-rolled steel which was facing a severe shortage.
Regarding the accusation of the Vietnam Association of Construction Contractorsthat steel makers were working together to push up steel prices in the domesticmarket, the Ministry of Industry and Trade said the claim was groundless.
The ministry pointed out that the Vietnamese economy was expected to expand atmore than six percent this year with the demand for steel ingots to increase bysix percent and steel products by 2 - 3 percent over last year. The steeldemand was estimated to total around 27 million tonnes this year.
Regarding construction steel supply, the ministry said that with new projectsoperational in 2020, including Hoa Phat Dung Quat Iron and Steel IntegratedComplex and Nghi Son Steel Complex, the domestic production capacity reachedabout 14 million tonnes which could fully meet domestic demand and exports.
However, for hot-rolled coil, the domestic capacity was estimated at around 5 -6 million tonnes. Last year, Vietnam had to import 10 million tonnes ofhot-rolled coil and was forecast to continue importing this product this yearto meet domestic demand.
The ministry predicted that steel prices might reach a new level as thepandemic was still developing globally.
However, when the virus was put under control, the steel prices would followthe market supply and demand./.
The price of steel in the domestic market increased by up to 45 percent inrecent months. The ministry’s Industry Agency said that the input costs of thesteel industry largely depended on the prices of raw materials in the globalmarket which has seen whopping increases recently.
Vietnam was reliant on imported raw materials for steel production, includingiron ore, scrap steel, fat coal and graphite electrodes.
It was predicted that Vietnam would have to continue importing many types ofraw materials for steel production this year with more than 18 million tonnesof iron ore, 6 - 6.5 million tonnes of scrap steel, 6.5 million tonnes of fatcoal and 10,000 tonnes of graphite electrode.
The prices of these raw materials were predicted to remain at high levels,which would directly affect steel production in the domestic market. The steelsector was expected to run a trade deficit this year, after a deficit of morethan 6.4 billion USD in 2020.
The agency also pointed out that delays in shipping due to the impacts of theCOVID-19 pandemic also pushed up steel production costs.
In response, the Ministry of Industry and Trade proposed to the Governmentpolicies to stabilise domestic steel supply and demand.
Specifically, the ministry proposed that the import taxes on some steelproducts which saw huge increases in prices should be put under consideration.
The Ministry of Construction was urged to provide forecasts about steel demandthis year to ensure a balance with the supply in the domestic market and forexports, which would serve as a basis for steel producers to be active inraising their production plans and increase efficiency.
For the long term, the Ministry of Industry and Trade would increase theapplication of trade defence instruments to promote the development of domesticsteel producers and to meet the steel demand for the domestic market andexport.
In an effort to promote domestic steel production, the Ministry of Industry andTrade urged the Government to introduce incentive policies to attractinvestment in new production or production expansion, especially in theproduction of hot-rolled steel which was facing a severe shortage.
Regarding the accusation of the Vietnam Association of Construction Contractorsthat steel makers were working together to push up steel prices in the domesticmarket, the Ministry of Industry and Trade said the claim was groundless.
The ministry pointed out that the Vietnamese economy was expected to expand atmore than six percent this year with the demand for steel ingots to increase bysix percent and steel products by 2 - 3 percent over last year. The steeldemand was estimated to total around 27 million tonnes this year.
Regarding construction steel supply, the ministry said that with new projectsoperational in 2020, including Hoa Phat Dung Quat Iron and Steel IntegratedComplex and Nghi Son Steel Complex, the domestic production capacity reachedabout 14 million tonnes which could fully meet domestic demand and exports.
However, for hot-rolled coil, the domestic capacity was estimated at around 5 -6 million tonnes. Last year, Vietnam had to import 10 million tonnes ofhot-rolled coil and was forecast to continue importing this product this yearto meet domestic demand.
The ministry predicted that steel prices might reach a new level as thepandemic was still developing globally.
However, when the virus was put under control, the steel prices would followthe market supply and demand./.
VNA
