Steel demand slumps during August

Steel rods are ready to be rolled out at the Viet Nam Germany Steel Pipe Co in the northern province of Vinh Phuc. — VNA/VNS Photo Huy Hung

HCM CITY — Steel sales plummeted in August despite a slight decline in prices, the Viet Nam Steel Association reported.

Pham Chi Cuong, its chairman, said around 350,000 tonnes were sold, a 40 per cent fall from the previous month.

The Ministry of Industry and Trade had predicted at the beginning of July that consumption would increase soon due to the Government's support.

The VSA said due to the low demand, many steel plants had to cut back on production.

Some of them, like Southern Steel, Phu My, Thai Nguyen, and Nha Be, even shut down temporarily or worked at 30-45 per cent of capacity, it said.

Around 3,000 employees have been affected, with 900 without work for the whole month and the rest working in turn.

The lack of demand has seen inventories shoot up to 350,000 tonnes, the same volume as the sales, the VSA said.

It had been just 50 per cent of consumption in July, Cuong said.

Companies are now finding ways to boost exports.

Le Phu Hung, director of the State-owned giant Viet Nam Steel Corporation, said the Government should stimulate demand by cutting value-added tax and increasing spending on construction.

It should also encourage exports, he said.

This year the industry hopes to achieve 3-4 per cent growth in sales, but the VSA is not confident it can be achieved. — VNS