Cancellation of tax rebate on billet hits Vietnam

Cancellation of tax rebate on billet hits Vietnam

The Vietnamese steel industry will likely suffer because of Beijing's recent move to cancel the export tax rebate on billets, asserts a report from the Vietnam Steel Association (VSA). In the first quarter of 2005, Vietnam met more than 42% of its billet requirements from China. During that period, Chinese billets were trading for around $10 less per ton than billets from other regions. It is for this reason that the increase in Chinese billet prices following the cancellation of export tax rebate is a matter of concern for the Vietnamese steel sector. Vietnam is expected to consume 3.5 million tons of billets this year, 71.4% of which will be met by imports. China, Russia, Ukraine and Malaysia are the main exporters of billets to Vietnam. VSA added that tight scrap supply in Vietnam and elsewhere is forcing Vietnamese billet producers to turn to domestic iron ores.