Steel manufacturers across the country are saying that 2012 will be a tough year due to oversupply and lack of demand.
Steel manufacturers across the country face a tough year
Domestic steel producers are suffering a decline in demand, as global meltdown forces many countries to continue tightening spending.
The price of steel on the world market is not expected to rise significantly, as the US and Europe are reducing imports, while causing extra inventory in large exporting nations, including China, South Korea and Japan.
According to the Vietnam Steel Association (VSA), domestic steel prices are expected to remain fairly stable this year for the same reason.
However, VSA added that steel prices this year may see some change if there are price adjustments to electricity, petrol, coal or other manufacturing costs.
A recent report from the VSA revealed that, aside from difficulties in sales, a number of steel manufacturing projects were currently short of capital, forcing investors to halt construction.
Some of these projects include the Steel Complex in northern Lao Cai Province and the 2nd phase of the Thai Nguyen Iron and Steel Complex, which would not be completed this year without quick solutions for contractors regarding disbursement and management.
Two other projects, managed by Van Loi Steel Joint Stock Company, in northern Hai Phong Province and Dinh Vu Steel Joint Stock Company in central Ha Tinh Province, despite having been completed, may not operate this year due to lack of capital for materials.
Notably, the Quang Lien Project in the central Quang Ngai province’s Dung Quat Industrial Zone is seen to have low feasibility, because of investors’ uncertain funding, despite having got the Government permission to increase investment capital to USD4.5 billion and capacity to 7 million tonns per year.
According to VSA, domestic steel manufacturers would face continued challenges in coming years if the industry does not take any appropriate steps to increase production for export.
