Workers at Hoa Phat Steel JSC prepare steel for export. The Viet Nam Steel Association (VSA) wants steel makers to stop reducing the selling price of their products to make the local steel market healthier. — VNA/VNS Photo Huy Hung

HA NOI (Biz Hub)— The Viet Nam Steel Association (VSA) required steel makers to stop reducing the selling price of their products to make the local steel market healthier.

The association said that local steel makers slashed their selling price by VND100,000-200,000 per tonne and even a few producers cut the price by VND1 million, though the rate was lower than production cost.

That created an unhealthy steel market, said Nguyen Tien Nghi, VSA deputy chairman.

Additionally, local steel products must compete with steel products containing boron imported at cheaper prices from China because these products receive a zero tax rate.

The association said last year that the volume of steel products containing boron imported from China to Viet Nam reached 679,000 tonnes for rolled steel products and 275,000 tonnes for flat steel.

The large volume of imported Chinese steel products have impacted local makers, especially now when they have had difficulties in production and business due to the economic downturn, the association said.

The producers have new products and they cut selling prices to attract customers. The association called on producers to stop reducing their selling price to fight for market share because reductions in selling price create losses and then they do not have the capital for continued production.

The producers should cut production cost and balance supply and demand to ensure adequate production and reduce inventories, the association said. They should also continue to expand export markets to increase sales.

The association also suggested that the State cut value-added-tax for steel products from 10 per cent to 5 per cent to promote sales.

Meanwhile, steel producers should strengthen improvements in technological production to decrease production costs and to improve competitiveness.

Steel consumption in August was expected to reach 360,000-370,000 tonnes but was 395,000 tonnes lower than July, Nghi said. — VNS