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Vietnam’s steel industry is forecast to see a steep rise in demand in 2011.
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Pham Chi Cuong, Chairman of the Vietnam Steel Association (VSA), said steel prices in the Vietnamese market this year will increase in comparison to last year. He explained that prices of materials for steel production, such as fat coal and iron ore, have increased in the world market since December.
The price increase is also due to a rise in the relative value of foreign currencies, higher interest rates and a possible electricity price hike, Cuong noted.
According to the VSA’s estimate, Vietnam’s steel consumption for this year will go up by anywhere between 8% and 10% from the previous year.
He added that the country may be able to produce six million tonnes of steel ingot this year, yet still have to import an additional two million tonnes to feed the increasing demand.
He worried, however, that local steel ingot production may be adversely affected by a nation-wide power shortage.
Steel production consumes five times the energy of steel processing.
In order to meet the rising demand, the Vietnam Steel Corporation (Vnsteel), the country’s biggest steel producer, set a goal for production output equal to VND14.2 trillion (USD710 million) this year, said General Director Dau Van Hung. Vnsteel aims to produce over 2.9 million tonnes of rolled steel, 1.25 million tonnes of steel ingot and over 342,000 tonnes of finished steel in 2011.
Vnsteel requested that the Government provide it with credit guarantees for foreign loans to speed up its hot rolled steel projects, which would have a capacity of two million tonnes per year.
Vnsteel also recommended that the Government minimise foreign currency lending, so as to mitigate imports of steel products could be produced locally, such as construction steel, cold rolled steel, zinc-plated sheet metal and steel pipes.
