The new export tariff rate, which applies to non-alloy steel, will be effective from August 11, the ministry said.

Local steel ingot producers in May began exporting products due to a sharp drop in domestic demand. Van Loi Steel and Cast Iron Co shipped 10,000 tonnes to the Philippines, and Dinh Vu Steel Co exported 30,000 tonnes to countries in Southeast Asia.

The two firms said that they were forced to export, as they could not sell the product on the domestic market. They said the Government’s lowering of the targeted growth rate as part of the anti-inflation campaign had resulted in the delay of many construction projects.

The Vietnam Steel Association (VSA) last month asked for Government permission to allow members to raise steel product prices in line with the increasing cost of input materials, namely steel ingots.

The association, which represents more than 20 leading steel makers in Vietnam, said the prices of finished steel products should be raised to match regional and world levels to minimize losses.

VSA said its members sold only 26,000 tonnes of finished steel last month, 60,000 tonnes less than a month earlier.

According to VSA, Vietnam will need 4 million tones of steel ingots this year. Domestic producers are anticipated to supply only 50 percent of this amount, with the remaining volume to come from imports.