The domestic steel sector would face difficulties due to fiercecompetition from imported steel, and the sharply reduced taxes levied onsuch imports, the Ministry of Industry and Trade said.
A reportfrom the ministry's Industry and Trade Information Centre showed thatwhen bilateral and multilateral trade pacts come into effect, theindustry would be under greater pressure from countries, which will beat a greater advantage, such as the Republic of Korea, Russia andBelarus.
In addition, several new production lines,including Vinakyoei, Posco SS and Formosa, would also ramp upcompetition in the sector.
The Finance Ministry had promulgated acircular 161/2011/TT-BTC that took effect at the beginning of thisyear, and relates to the preferential import taxes that will be leviedfollowing the implementation of the ASEAN Agreement on Trade in Goodsfor 2015 to 2018 period.
As per the circular, the import taxes levied on steel, iron ore and alloy imports will be zero percent.
The report said the sharp tax cuts would create both opportunities and challenges for Vietnamese firms.
TheVietnam Steel Association (VSA) had said last year that imported steelwas up 11 million tonnes, reflecting a 105 percent year-on-year jump.
Ofthis, 4.78 million tonnes was imported rolled steel, containing 0.0008percent boron (Bo) element, and was labelled as metal in order to enjoythe preferential tax of zero percent.
The steel wassold in the market at a price, which was 1 million VND to 2 million VNDper tonne lower than the price of domestic steel.
It was because of this reason that several local steel plants had to cut capacity by up to 60 percent or face dissolution.
The ministry said domestic steel consumption during the first twomonths of the year touched 300,000 tonnes, slipping 30 percent over thesame period last year.
Construction steelconsumption, including exports during the two month period was 645,204tonnes, representing a 7 percent year-on-year increase.
It also forecast that the market would improve in the second quarter,but would see prices unchanged due to oversupply and increased imports.
The VSA said the country's steel consumption thisyear would jump 8 percent or 6 million tonnes. However, steel output inthe country has been pegged at 11 million tonnes, which is double thedemand, thus further pressuring domestic producers.
TheTrade Information Centre said the Government should allow private steelcompanies to take part in an auction for State-invested construction inorder to facilitate the development of the industry.-VNA
A reportfrom the ministry's Industry and Trade Information Centre showed thatwhen bilateral and multilateral trade pacts come into effect, theindustry would be under greater pressure from countries, which will beat a greater advantage, such as the Republic of Korea, Russia andBelarus.
In addition, several new production lines,including Vinakyoei, Posco SS and Formosa, would also ramp upcompetition in the sector.
The Finance Ministry had promulgated acircular 161/2011/TT-BTC that took effect at the beginning of thisyear, and relates to the preferential import taxes that will be leviedfollowing the implementation of the ASEAN Agreement on Trade in Goodsfor 2015 to 2018 period.
As per the circular, the import taxes levied on steel, iron ore and alloy imports will be zero percent.
The report said the sharp tax cuts would create both opportunities and challenges for Vietnamese firms.
TheVietnam Steel Association (VSA) had said last year that imported steelwas up 11 million tonnes, reflecting a 105 percent year-on-year jump.
Ofthis, 4.78 million tonnes was imported rolled steel, containing 0.0008percent boron (Bo) element, and was labelled as metal in order to enjoythe preferential tax of zero percent.
The steel wassold in the market at a price, which was 1 million VND to 2 million VNDper tonne lower than the price of domestic steel.
It was because of this reason that several local steel plants had to cut capacity by up to 60 percent or face dissolution.
The ministry said domestic steel consumption during the first twomonths of the year touched 300,000 tonnes, slipping 30 percent over thesame period last year.
Construction steelconsumption, including exports during the two month period was 645,204tonnes, representing a 7 percent year-on-year increase.
It also forecast that the market would improve in the second quarter,but would see prices unchanged due to oversupply and increased imports.
The VSA said the country's steel consumption thisyear would jump 8 percent or 6 million tonnes. However, steel output inthe country has been pegged at 11 million tonnes, which is double thedemand, thus further pressuring domestic producers.
TheTrade Information Centre said the Government should allow private steelcompanies to take part in an auction for State-invested construction inorder to facilitate the development of the industry.-VNA
