Vietnam government has been urged to consider tightening steel export policies to preserve domestic market as steel prices escalated recently.
Vietnamese deputy prime minister Le Minh Khai urged the Ministry of Industry to increase domestic steel production to meet the demand and limit its export which grew by 40pc to 2.1mn mt from Jan-April 2021.
However, the ministry explained the price hike, saying that it is a global issue and since domestic steel production relies on imported raw materials, a price hike is inevitable. The Vietnamese Steel Association (VSA) urged the country’s steelmakers to give preference to locally produced raw material over high-priced imported material to keep the operating expenses and selling prices in check.
Statistics reported by local media showed the current prices of raw materials increased by 37-39pc since October 2020. Ore price crossed $220/mt on May 10 this year in the global market, breaking the record of $194 set a decade ago.
Steel prices in Vietnam have gone up 40-50pc since the beginning of the year, according to VSA, while steel exports in Q1 rose 59.5pc year-on-year to 1.6mn mt.
The ministry said they were analyzing technical restrictions and quality benchmarks to keep the market safe.
Market development is monitored keenly to deal with the dumping of low-quality steel into the country and anti-dumping lawsuits on Vietnam-created products to protect the domestic producers.
Deputy director of the tax policy department in Vietnam’s finance ministry said the country could contemplate modifying safeguard duties on steel ingots and construction steel outputs, which are to be in place till 2023, to reduce prices.