Steel industry at scrap shortage risk in Vietnam
The scheduled capacity increase of billets production in Vietnam may result in steel scrap shortage, once the intended new capacities come on stream. Vietnam is planning to bring five new billet mills into production by the year 2005, with an aim to avoid high priced imports. According to statistics, the Vietnamese steel industry for the time being can only produce 400'000 mts of billets per year, while the requirement in the country is at 2.5 million mts. Steel scrap, used as the raw material in billet production in minimills is mostly used in the billet production process in Vietnam. Therefore the country needs to rely on a steady supply of scrap, to be able to recover from the import dependancy for billet requirement. According to authorities, through continously increasing scrap imports Vietnam has finally reached 300'000 mt levels, whereas a lot higher tonnage is needed in order to increase production and develop the industry. In addition to such difficulty, the ambiguity regarding the definition of steel scrap, often causing disputes between environmentalists and steel producers is also creating worries in the industry. A discrimination of the waste material needs to be placed as soon as possible, in order to clarify the situation. In view of above facts, industry experts point out to a scrap shortage to be experienced in Vietnam.