Intell Asia reported that many of Vietnam's domestic steel makers recently have raced to lower the steel prices although the peak construction season starts because the cheap imported steel is flooding the market. The movement showed that local steel producers are fighting to obtain market shares in the home market that is developing impressively at this time thanks to the government's demand stimulus policy.
As per report, Vietnam Steel Corporation lowered the steel price by VND 200,000 per tonne from the middle of October. The move is the consequence of the increasing steel imports in the recent time and massive rise of new steel mills. At present, the country's steel manufacturing capacity reached approximately seven million tonnes a year, showing a high surplus against the consumption and forcing steel producers to enter into a tense competition.
In September 2009, the steel sales in Vietnam declined by 100,000 tonnes month on month but still jumped 200% compared with last September.
A representative of Vietnam Steel Association said that domestic market shares of Vietnamese steel makers are being narrowed due to the flooding of imported steel. Last month, over 40,000 tonnes of rolled steel was imported to Vietnam with a price of around VND 500,000 to VND 700,000 per tonne. Current price of steel billet in the south eastern Asia market and China stands at USD 490 to USD 500 per tonne, down USD 10 to USD 20 per tonne from August. Even some suppliers offered the price of USD 480 to USD 485 per tonne.
Rolled steel price from Malaysia to Vietnam now is cheaper by VND 700,000 per tonne against the domestically made steel because Malaysia enjoys Vietnam's import tariff exemption of 0%. Foreign made rolled steel accounts for 70% of the domestic market share, jumping strongly from 28% in 2008 early. The fact is alarming.
