Vietnam News quoted Mr Do Huu Hao deputy minister of trade and industry as saying that although steel manufacturers saw good results in production and business in 2009, the steel sector would still face many difficulties in 2010.
In 2009, despite the global economic crisis and difficulties due to low priced imported steel and rising production costs, the steel industry is one of the industrial sectors that achieved high growth with an output increase of 25% and consumption up 30% over the previous year.
Most members of the Viet Nam Steel Association achieved high growth compared with 2008, including the Viet Nam Steel Corporation which managed an increase of 14% to VND 11.66 trillion in industrial production value and steel output of more than 2,382 million tonnes.
However, in 2010, the steel sector still faces many difficulties, of which the price hike of materials for steel production such as coal, electricity, oil and iron ore is a big one. Cheap imported steel is also still a large obstacle standing in the way of sustainable development of the steel sector. As a result, the price of steel is forecast to increase in 2010.
On top of this, the competitive pressure from imported steel has increased, especially from China and South Korea, because of tax reductions in line with WTO commitments, and the government has ceased the stimulus packages and increased basic interest rates.
Mr Pham Chi Cuong chairman of the association said that additionally, there would be harsh competition in domestic construction steel markets in 2010 due to a surplus.
To overcome these difficulties, the VSA has asked relevant agencies to protect the domestic market by stopping illegal steel import. The association has also asked agencies to enforce customs regulations to avoid the import of large volumes of steel, especially products that are in a surplus and prevent trade fraud.
Meanwhile, Mr Dau Van Hung general director of VNSteel said that the sector needed the Government’s support in stimulating the domestic market, maintaining stable forex rates and offering sufficient foreign currency for the import of raw materials for production purposes.
For the corporation, it will continue the implementation of key, strategic development projects and focus on research and analysis, strengthening trade promotion, trademark development and the search for new export markets.