Ministry to host public consultation on tariffs for imported steel

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

In early March, the Ministry of Industry and Trade 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% on steel billets and 14.2% on long steel products for a maximum of 200 days.

Explaining the extra tariff, the Ministry of Industry and Trade said the measure aimed at protecting 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.

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 VND10.3 million and VND10.7 million (US$460-US$480) per tonne to VND12.5 million to VND13.5 million per tonne.

"My new house needs around nine tonnes of steel," Duong Van Them, who is building a new house, told Tin tuc (The News) newspaper. "I have paid a deposit of VND100 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 VND20 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 Vietnam 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 US$310 per tonne and increased slightly to US$320 per tonne in March.

According to experts' calculations, even though safeguard tariffs have been imposed, the increase of VND2 million is unreasonable.

Instead of trying to raise steel prices, domestic producers should boost the production of steel billets and long steel products so they can meet domestic demand with high quality and competitive prices, said Nguyen Van Sua, Vice Chairman of the Vietnam Steel Association.