The Government Office April 8 sent a notice to Vietnam Steel Association and 27 steel manufacturers to demand them to refrain from raising prices until June, the Saigon Times Daily reported.
The move is aimed to curb inflation as steel is the country’s sixth strategic items after electric power, coal, fuel, cement and tap water, of which prices will immediately affect the economy if increased.
All the local, joint-venture and foreign-invested steel companies should not increase prices between now and June, said Pham Chi Cuong, chairman of the association.
The association earlier pledged to find ways to stabilize prices by end-April but he market has seen strong price increases in recent time. Therefore, the government decided to intervene, he said.
Currently, the import price of steel ingot is high at US$860 per ton. With a 5 per cent value added tax and transport cost included, the price of steel products quoted by distributors in major cities like Hanoi and Ho Chi Minh City amounts to VND16 million per ton (some US$1,000). But the actual market price may climb VND17.8 million.
Price rigging is to blame for the increases, said Nguyen Tien Thoa, head of the Price Department of the Ministry of Industry and Trade.
Except for the Vietnam Steel Corporation and Thai Nguyen Steel Co., which supply steel to more than 20 premier distributors nationwide, other enterprises sell steel through intermediaries that manipulate prices, he said.
Cuong said his association had coordinated with the ministry to inspect the production, distribution and consumption but he ministry had not been able to release any report on steel speculation.
One of the possible reasons for the price increases is that steelmakers are holding onto their products in anticipation of higher prices while users are rushing to buy for fear of paying more for steel in the future, he said. (Saigon Times Daily)
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