According to Vietnam Steel Association (VSA) chairman Pham Chi Cuong, steel prices in Vietnam will continue to rise in 2008 due to scarcity of domestic supplies and also on the back of China's readjustment of its export tax on steel billet to 25 percent.
Mr. Cuong stated that the fact that many steel billet mill projects are yet to be completed, along with the increasing need for steel from the construction sector, is expected to push demand for steel in Vietnam to over 300,000 metric tons in the first quarter of 2008. However, many sellers do not have enough steel to satisfy consumers' appetites, mainly due to the fact that many domestic producers have either ceased or reduced their production, unable to compete with cheaper Chinese imports to Vietnam. For instance, according to the VSA, steel imports increased dramatically in 2007 to about 500,000 metric tons - up three-fold compared to the 2006 figures. However, even these imports were not able to satisfy Vietnam's steel demand, which totaled two million metric tons in 2007.
In 2008, when imports from China will be limited due to high prices, Vietnam's domestic market will experience even greater scarcity, which will lead to a continuous increase in steel prices in Vietnam.