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VietNamNews

Steel firms deplore import deposits

Update: June, 20/2015 - 08:29
Under Decree No 38/2015/ND-CP on the management of wastes and scraps, importers must pay a deposit for importing scrap metal. The deposit ranges between 10 per cent and 20 per cent of the import value, depending on the import volume. — Photo ndh

HA NOI (VNS)— A new regulation, which took effect from the beginning of this week, requiring a deposit for scrap metal import is burdening steel companies, the steel industry's association has said.

Under Decree No 38/2015/ND-CP on the management of wastes and scraps, importers must pay a deposit for importing scrap metal. The deposit ranges between 10 per cent and 20 per cent of the import value, depending on the import volume.

According to Chu Duc Khai, deputy president of the Viet Nam Steel Association, the regulation is aimed at preventing firms from importing low-quality scraps.

However, deposit rates are too high for steel producers who are already facing many difficulties, including high inventories and low competitiveness. Khai added that many steel companies were now operating at just 50 per cent of their capacity and are seeking ways to cut costs.

Kieu Chi Cong, director of Hoa Phat Steel Company, said many firms were on the verge of bankruptcy as the costs of producing steel billets from scrap metals are much higher than imported billets.

Paying deposits would push up production costs, threatening to lower the competitiveness of steel firms, he added.

According to the association, a bank guarantee is more appropriate for importing scrap metal rather than a deposit as security. — VNS


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