VSA Raises Concern over Virtual Rise in Steel Sales
The sudden increase in steel sales to 320,000 tons in November may be an unreal consumption, said Pham Chi Cuong, chairman of Vietnam Steel Association (VSA).
After three months of sharp fall, November steel sales returned to the usual average level. The figure was only some 110,000 tons in the three previous months.
Cuong, however, doubted it was a virtual rise as saying that steel traders could take advantage of low steel prices to buy in and wait for price hikes in early next year to sell out.
“Steel only ran from this storehouse to others rather than real steel demand by consumers for construction works,” said steel experts.
VSA’s total steel sales will be around three million tons this year, down 500,000 tons on-year. The association set target of 3.6 million tons earlier.
Cuong forecast that steel sales will reach a maximum of 3.5 million tons in 2009, up 10 per cent compared with 2008 and equal to 2007.
Flat steel sales this year is mainly blamed for high inflation in early this year, forcing the government to cut much expenditure including slashing investment and tightening credits, which has led to a reduction in construction works.
At present, VSA has an inventory of 500,000 tons of steel ingots and 200,000 tons of finished steel.
Factory steel price is fluctuating VND11.5 million/ton and market prices of Pomina and Vina Kyoei VND12.5 million/ton. (vietstock.com.vn)
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