The steel sector in the first month of 2014 encountered difficulties due to an imbalance between supply and demand, according to the Ministry of Industry and Trade.

Local steelmakers reached a mere 40-50 percent of their manufacturing capacity during the period, with several stopping producing altogether during the Lunar New Year (Tet) – the longest annual holiday in Vietnam.

In January, about 309,000 tonnes of rolled steel was produced, up 16.7 percent from the same period last year, while the output of crude steel and billet steel were estimated at 237,000 (down 22.4 percent) and 249,000 tonnes (down 3 percent) respectively.

The considerable decrease in local demand for construction material by the end of 2013 also posed a headache to the sector.

To iron out these difficulties, steelmakers should focus on boosting production of steel billets to reduce their dependence on imports, industry analysts have advised.

Vietnam’s total steel production output was estimated at over 5 million tonnes in 2013, a 2.7 percent yearly increase.

This year, the Vietnam Steel Corporation has set a target of producing nearly 1.5 million tonnes of steel billets and 2.6 million tonnes of rolled steel, year-on-year increases of 24.5 percent and 8 percent respectively.-VNA