The local retail price of steel will likely continue climbing due to a predicted increase of 30-40 percent in the price of raw materials used in steel production, the Vietnam Steel Association (VSA) announced March 22.
The cost of the raw materials is expected to surge on the world market in late April, the association said.
At present, the wholesale price of steel, exclusive of tax and commission for wholesalers, is VND12-12.8 million (US$615-656) per ton, about VND600,000 ($30) higher than earlier this year.
In addition to the skyrocketing price of raw materials on the world market, VSA said that domestic prices of gasoline, electricity, coal and the foreign currency exchange rate would likely contribute to the price increase of domestic steel.
The association has urged the Government to take immediate action to help control the price surge. Proposed measures include reducing the import quota for cold-rolled steel and coil steel; and stopping the sale of foreign currencies to local steel import enterprises that only import waste steel or any types of steel that local manufacturers can produce effectively.
VSA has also requested that foreign currencies be offered to those who wish to import raw materials for steel manufacturing.
According to the association, the local steel industry imported nearly six million tons of steel in varying types in 2009. There is currently an excess of around 700,000 tons of cold-rolled steel and 500,000 tons of coil steel, however.
VSA has said that if the Government can reduce the import quota for these two items, the country could save $700 million in import costs and the local industry will find it easier to reach its target of increasing growth by 12 percent in 2010.
