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Businesses To Discuss Steel Tariffs

Friday 08, 04 2016
HÀ NỘI (VNS) — The Việt Nam Competition Authority (VCA) will host a public consultation meeting on May 5 to collect opinions from agencies and businesses on the duties imposed on imported steel.
Businesses To Discuss Steel Tariffs

HÀ NỘI (VNS) — The Việt Nam Competition Authority (VCA) will host a public consultation meeting on May 5 to collect opinions from agencies and businesses on the duties imposed on imported steel.

At the meeting, participants can present opinions on protective measures for steel products imported to Việt Nam, according to the VCA.

As previously reported by Việt Nam News in early March, MOIT announced safeguard duties on imported steel products as a temporary protective measure against inexpensive imports that were allegedly threatening the domestic industry.

According to Decision No 862/QĐ-BCT, the ministry will issue temporary safeguard duties of 23.3 per cent on steel billets and 14.2 per cent on long steel products for a maximum of 200 days.

Explaining the extra tariff, the Ministry of Industry and Trade said it was a temporary measure aiming to protect the domestic steel industry from a flood of cheap steel, mainly from China.

The move also targeted to help local steel makers have more time to spend on business restructuring and competitiveness improvement.

Businesses To Discuss Steel Tariffs
Steel is prepared to be transported at Viet Duc Steel Co in the northern province of Vinh Phuc. — VNS/VNS Photo Tran Viet
 

However, many companies in the country do not consider the tariffs an opportunity to improve their production quality or enhance their competitiveness. They see them as taking advantage of the opportunity to raise steel prices, leading to a price surge in the domestic steel market.

About half a month after the tariffs were applied on March 7, steel prices increased from between VNĐ10.3 million and VNĐ10.7 million (US$460-480) per tonne to VNĐ12.5 to 13.5 million per tonne.

“My new house needs around nine tonnes of steel,” Dương Văn Thêm, who is building a new house, told Tin tức (The News) newspaper. “I have paid a deposit of VNĐ100 million for the steel seller in February, but as steel prices have increase after the new tariffs were applied in early March, I must spend an additional VNĐ20 million.”

That was just the losses suffered by one household. Building constructors, who use thousands of tonnes of steel per year, must spend more as well.

Many local steel suppliers are hoarding steel, which is putting additional pressure on consumers when, in fact, there is no shortage of steel for domestic consumption.

According to data from the Việt Nam Steel Association, steel production output in the first two months of this year reached more than 1.15 million tonnes, while consumption is only estimated at around 1.05 million tonnes, excluding steel companies’ inventory of more than 500,000 tonnes.

World steel prices in the first two months of this year remained at $310 per tonne and increased slightly to $320 per tonne in March.

According to experts’ calculations, even though safeguard tariffs have been imposed, the increase of VNĐ2 million is unreasonable.

To compete with steel importers, domestic producers should seek ways to lure customers such as improving product quality and reduce prices, said Nguyễn Văn Sưa, vice chairman of the Việt Nam Steel Association. — VNS

Read more: What Should Businesses Do About The Terrible 465% Tax On Vietnam Steel?

Categories:
Financial News

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