The domestic steel industry is continuing to suffer while the realestate market remains frozen, according to the Market Watch Team.
September steel consumption was low due to prolonged storms and therainy season, reported the Ministry of Industry and Trade's Industry andTrade Information Centre (VITIC).
September's construction steel output reached 355,000 tonnes, down 3 percent against August and 4 per cent year-on-year.
Steel consumption decreased 5 percent against August and 6 percent compared to the same period last year.
Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association(VSA), blamed the situation on the frozen real estate market andstagnated construction projects.
In previous years, hesaid, steel typically fetched 20 million VND (952 USD) per tonne; it nowsells for 14-14.5 million VND (666-667 USD) per tonne.
Purchasing power is low, about 300,000 tonnes per month as compared to the previous rate of 400,000 tonnes, he added.
Industry insiders also attributed the high inventory to low consumptionof steel and the fact that domestic steel producers are facingdifficulties as cheap Chinese steel floods the local market.
Many steel manufacturers have had to lower their production capacity by more than 50 percent, with several seeing losses.
Increases in the electricity price also affected local production costs and the competitiveness of domestic products.
However, VSA still predicted that consumption of domestic constructionsteel would increase by about 3-5 per cent compared to 2012, with avolume of five million tonnes.
They believed that thedomestic property market could bounce back late this year and demand forbuilding material may also increase.
They alsopredicted that retail prices of construction steel would stabilise thismonth after the price hike in mid-September.
Steel for factories now fetches between 13.5 million and 14.1 million VND per tonne, not including value added tax.
In the last nine months this year, cement production and consumption have surged slightly over the same period last year.
According to VITIC, in the last nine months, despite increases in coal,electricity, fuel prices and financing cost that lead to higherproduction costs, the cement price at factories remained stable.
In the northern market, cement prices ranged between 1.3 million and1.5 million VND per tonne, while in the southern market, they rangedbetween 1.6 million and 1.8 million VND per tonne.
The retail price for cement went up by 2,000 VND per cement package.
To make the domestic construction materials market more stable, theVietnam Construction Material Association recently asked the Governmentto build more national highways with concrete so as to stimulate cementsales.
The association also proposed the Governmentremove difficulties for building materials producers relating to taxincentives, debt and preferential loans.
Nguyen HuyThang, deputy secretary general of the Vietnam Glass Association,suggested that the Government offer incentives for businesses to useindustrial and agricultural waste to manufacture building materials.
Besides, Thang said, banks also needed to make it easier for businessesto get loans so they could invest in improving their products.-VNA
September steel consumption was low due to prolonged storms and therainy season, reported the Ministry of Industry and Trade's Industry andTrade Information Centre (VITIC).
September's construction steel output reached 355,000 tonnes, down 3 percent against August and 4 per cent year-on-year.
Steel consumption decreased 5 percent against August and 6 percent compared to the same period last year.
Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association(VSA), blamed the situation on the frozen real estate market andstagnated construction projects.
In previous years, hesaid, steel typically fetched 20 million VND (952 USD) per tonne; it nowsells for 14-14.5 million VND (666-667 USD) per tonne.
Purchasing power is low, about 300,000 tonnes per month as compared to the previous rate of 400,000 tonnes, he added.
Industry insiders also attributed the high inventory to low consumptionof steel and the fact that domestic steel producers are facingdifficulties as cheap Chinese steel floods the local market.
Many steel manufacturers have had to lower their production capacity by more than 50 percent, with several seeing losses.
Increases in the electricity price also affected local production costs and the competitiveness of domestic products.
However, VSA still predicted that consumption of domestic constructionsteel would increase by about 3-5 per cent compared to 2012, with avolume of five million tonnes.
They believed that thedomestic property market could bounce back late this year and demand forbuilding material may also increase.
They alsopredicted that retail prices of construction steel would stabilise thismonth after the price hike in mid-September.
Steel for factories now fetches between 13.5 million and 14.1 million VND per tonne, not including value added tax.
In the last nine months this year, cement production and consumption have surged slightly over the same period last year.
According to VITIC, in the last nine months, despite increases in coal,electricity, fuel prices and financing cost that lead to higherproduction costs, the cement price at factories remained stable.
In the northern market, cement prices ranged between 1.3 million and1.5 million VND per tonne, while in the southern market, they rangedbetween 1.6 million and 1.8 million VND per tonne.
The retail price for cement went up by 2,000 VND per cement package.
To make the domestic construction materials market more stable, theVietnam Construction Material Association recently asked the Governmentto build more national highways with concrete so as to stimulate cementsales.
The association also proposed the Governmentremove difficulties for building materials producers relating to taxincentives, debt and preferential loans.
Nguyen HuyThang, deputy secretary general of the Vietnam Glass Association,suggested that the Government offer incentives for businesses to useindustrial and agricultural waste to manufacture building materials.
Besides, Thang said, banks also needed to make it easier for businessesto get loans so they could invest in improving their products.-VNA
