Vietnam Steel Association said that domestic steel consumption in 2008 could be about 3 million tonnes, a drop of 500,000 tonnes, or 14%, from 2007.
At the beginning of 2008, VSA had set a target of selling 3.6 million tonnes, in addition to 600,000 tonnes expected to be sold by producers who are not members of the association.
In September 2008, VSA predicted steel consumption in Vietnam may drop this year after the government asked state owned companies to halt construction projects that were not crucial. From August to October 2008 period, steel consumption fell to about 110,000 tonnes a month, but last month sales surged to 320,000 tonnes.
Mr Pham Chi Cuong chairman of VSA said that the unexpectedly high steel sales last month could have been driven by speculation, not by a real strengthening of demand. He added that it was possible that businesses were stockpiling steel in anticipation of higher demand in coming months.
VSA said that across the country, steel producers have about 500,000 tonnes of steel billet and 200,000 tonnes of finished steel products in stock they want to clear. Steel producers said they were selling steel products under cost, at about VND 11.5 million per tonne, in a bid to boost consumption.
Meanwhile, ministry of construction said that Vietnam may consume 36 million tonnes of cement in 2008, about 5 million less than forecast. The ministry had previously predicted Vietnam would use 40 to 41 million tonnes of cement in 2008, a 14% increase on last year.