ID :
29828
Wed, 11/12/2008 - 22:00
Auther :
Shortlink :
http://m.oananews.org//node/29828
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Clouds loom over steel industry, warns official
Hanoi (VNA) - The steel industry needs to prepare itself for a rocky road
ahead as the global economy declines, said Le Duong Quang, Deputy Minister
of Industry and Trade.
Quang was speaking at a meeting between steel companies and ministry
representatives in Hanoi on Nov. 10 to find solutions to save domestic
steel companies from bankruptcy.
Stockpilled steel in companies and manufacturers nationwide is currently
around 3 million tonnes. Steel production and consumption have rapidly
decreased as fewer firms can find the funds to carry out construction
projects.
According to a report from the Vietnam Steel Association (VSA), steel
consumption has fallen for the fourth time since the end of the second
quarter of this year.
The country used only 120,000 tonnes of steel in October. The problem is
worsened by the declining of steel price on the world market.
At the meeting, delegates highlighted other problems, including weak
cooperation between steel manufacturers. Firms trying to get rid of their
stockpiles sold them at cut-price rates, which affected the whole industry,
experts said.
One way to tackle the situation would be to increase import tax, the meeting
heard.
The VSA and companies such as Hoa Phat, Dinh Vu, and Nam Vang suggested that
the Government increase the import tax on pig iron from 2 percent to 20
percent. Import tax on other kinds of steel should also rise from 9 percent
to 25 percent, participants said.
The companies urged the Government to provide financial support and to
control the price of other building materials.
Steel companies also asked banks to cut interest rates so construction
companies would have enough capital to resume delayed building work.
This made it difficult to set up a fund to stablise prices on the steel
market because it needed so much money, companies said. The Government
should have policies to prolong maturity dates so that steel ingot producers
could still operate.
Representatives of the companies said support policies would save the
country's pig iron production industry and would help buoy the economy as a
whole.
Some experts argued higher import taxes had to be considered carefully due
to their impacts on producers, building companies and consumers.
A representative from Vietnam Steel said more tax was just a short-term
solution because domestically produced steel ingot could only meet 20
percent of demand.
Others said changing business strategy to increase consumption was still the
best way. Improving technologies to reduce the price and strengthening
cooperation could also work.
The Ministry of Industry and Trade also said it planned to ask the
Government to speed up current construction projects to boost steel
consumption.-Enditem
ahead as the global economy declines, said Le Duong Quang, Deputy Minister
of Industry and Trade.
Quang was speaking at a meeting between steel companies and ministry
representatives in Hanoi on Nov. 10 to find solutions to save domestic
steel companies from bankruptcy.
Stockpilled steel in companies and manufacturers nationwide is currently
around 3 million tonnes. Steel production and consumption have rapidly
decreased as fewer firms can find the funds to carry out construction
projects.
According to a report from the Vietnam Steel Association (VSA), steel
consumption has fallen for the fourth time since the end of the second
quarter of this year.
The country used only 120,000 tonnes of steel in October. The problem is
worsened by the declining of steel price on the world market.
At the meeting, delegates highlighted other problems, including weak
cooperation between steel manufacturers. Firms trying to get rid of their
stockpiles sold them at cut-price rates, which affected the whole industry,
experts said.
One way to tackle the situation would be to increase import tax, the meeting
heard.
The VSA and companies such as Hoa Phat, Dinh Vu, and Nam Vang suggested that
the Government increase the import tax on pig iron from 2 percent to 20
percent. Import tax on other kinds of steel should also rise from 9 percent
to 25 percent, participants said.
The companies urged the Government to provide financial support and to
control the price of other building materials.
Steel companies also asked banks to cut interest rates so construction
companies would have enough capital to resume delayed building work.
This made it difficult to set up a fund to stablise prices on the steel
market because it needed so much money, companies said. The Government
should have policies to prolong maturity dates so that steel ingot producers
could still operate.
Representatives of the companies said support policies would save the
country's pig iron production industry and would help buoy the economy as a
whole.
Some experts argued higher import taxes had to be considered carefully due
to their impacts on producers, building companies and consumers.
A representative from Vietnam Steel said more tax was just a short-term
solution because domestically produced steel ingot could only meet 20
percent of demand.
Others said changing business strategy to increase consumption was still the
best way. Improving technologies to reduce the price and strengthening
cooperation could also work.
The Ministry of Industry and Trade also said it planned to ask the
Government to speed up current construction projects to boost steel
consumption.-Enditem
