Vietnam Likely to Encounter Steel Shortage in Two Months

Vietnam may lack steel in two months unless the government allows firms to reflect true world steel prices, the Vietnam Investment Review newspaper cited Nguyen Thanh Chuy, deputy general director of Vietnam Steel Corp. (VSC), as saying.

 

Many steel companies stopped importing steel or even re-exported steel billets because global prices had skyrocketed while the local price has not increased since March, 2008, Chuy said.

 

Chuy said world prices of steel billets have gone up to US$1,200 per ton while VSC companies still have to sell their steel at VND15.2 million per ton, equivalent to the steel billet price of US$850 per ton.

 

Raising steel prices is necessary, said the second proposal by Vietnam Steel Association sent to the government at the of June.

 

To avoid losses, almost all steel companies have not signed contracts to import steel billets since March, leaving Vietnam in danger of lacking steel billets in the coming months, it said, adding several steel companies&rsquo re-exportation of steel billets contributed to the country&rsquos likely shortage of billet steel.

 

At present, the country has stockpile of 255,000 tons of steel and 300,000 tons of steel billets. This stockpile of steel and billets is still sufficient for the domestic demand in July and August, Chuy said. (VIR )