Vietnamese-owned ingot steel factories lack a sufficient amount of scrap steel to continue production at high levels, according to the Ministry of Industry and Trade. Pham Chi Cuong,

chairman of the Viet Nam Steel Association, said current scrap steel
volume only meets about 10 per cent of the domestic production.

Steel ingot producers, including Song Da Steel Joint Stock Co, Thep
Viet Ltd Co and Hoa Phat Group, have not been able to acces bank loans
in foreign currencies to import materials.

Commercial banks are allowed to help firms that use foreign currencies
to import steel billet or steel products, but not scrap steel.

The companies say the market could be overwhelmed with foreign-made products, causing the local industry to fall into decline.

In the first six months of the year, Viet Nam imported 980,000 tonnes
of scrap steel, while 2 million tonnes are expected to be needed for
the entire year.

Steel ingot capacity is targeted to reach 4.5 million tonnes this year, which meets only 60 per cent of the domestic demand.

Nguyen Tien Nghi, vice chairman of the association, said many domestic
compnaies had decided to use domestic iron ore instead of scrap steel
to produce steel ingot, aiming at higher profits.

Many iron-ore production projects have been launched recently. The Thai
Nguyen Iron and Steel Corporation (Tisco) plant can turn out more than
400,000 tonnes of iron ore per year and the output is expected to
increase to 1 million tonnes for the project’s second phase.

Source: VNS

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