Declining steel prices and the devaluation of the domestic currency have made it difficult for steelmakers to meet their business targets for the year, and share prices of many steelmakers have plunged accordingly over the past six months, an industry executive has said.

The year could be tough for the steel industry due to the challenges posed by the foreign exchange rate and high interest rates, said Pomina Steel (POM) chairman Do Duy Thai.

"It will be hard for us to complete the year's plan to achieve a profit of 612 billion VND (29.5 million USD) as our company has to cover losses caused by exchange rate fluctuations," Thai said in an interview with the newspaper Dau tu Chung khoan (Securities Investment).

POM, which leads the steel market with a 15.2-per-cent market share, currently has to import 70 percent of its raw materials.

SMC Trade and Investment Co (SMC) was also compelled to reduce its net profit target from 90 billion VND (4.3 million USD) to 80 billion VND (3.85 million USD) and extend its estimated time of completion for its Hiep Phuoc project since costs have risen sharply. "However, we have to import only 30 percent of raw materials, the difficulties due to exchange rate are less serious than in other companies," the company said.

Dai Thien Loc Co (DTL) was trying to restrict exchange rate risks by promoting exports, but the weakness of the world economy has significantly affected the company's export performance, causing the DTL to trim its earnings targets by about 19 percent.

Vietnam-Italy Steel Co (VIS) said the slowdown in real estate sales and construction had also hurt the industry.

Shares of steelmakers on both national stock exchanges have fallen by 7-29 percent since May this year, with shares of Hoa Sen Group (HSG), Huu Lien Asia Corp (HLA), Tien Len Corp (TLH), Vietnam-Germany Steel Pipe (VGS) and Phuc Tien Co (PHT) falling below their face values./.