Chinese steel uses tax loophole

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Vietnamese steel makers continue to face difficulties in production and business because of fierce competition with Chinese steel products and over supply.

Do Duy Thai, general director of Thep Viet Corporation that holds 61.7 per cent of shares at Pomina steel company, said 300,000 tonnes of steel had been imported from China at zero per cent import tax.

The imports were taking advantage of a loophole allowing steel made by the oxygen-converter process to enter Viet Nam free of duty.

He said the State should impose import tax on steel products made by the process.

The Chinese imports are said to have seriously affected the domestic steel industry because the selling price of the Chinese steel is now US$20-30 per tonne cheaper than that made locally.

Meanwhile, the price of local steel products fell by VND2 million ($95.2) to VND15.4-17.8 million ($733-847) in the north and VND16-18 million ($762-857) in the south.

Viet Nam Steel Corporation general director Le Phu Hung said in the first half this year, seven out of 13 corporation members and its five joint ventures had suffered losses due to difficulties in production and business.

The assoChinese steel uses tax loopholeciation reported that in the first half this year, sales by the local steel industry increased year-on-year by 6.84 per cent to 5.8 million tonnes, including 1.4 million tonnes for export, much of it to ASEAN nations.

However, consumption of building steel fell by 8.5 per cent year-on-year reduction to 2.39 million tonnes in the first half this year and stockpiles of ingots reached 500,000 tonnes.

Tran Van Kham, director of Thai Nguyen Steel Company, said the company would face difficulties reaching its targets in the second half of this year, including producing 314,000 tonnes of steel and 204,000 tonnes of steel ingots.

Director of Southern Steel Company Ta Trung Hieu said in the first half of this year, his company did not achieve most of its targets in production and business against the same period of last year. Therefore, he predicted the second half would be also a difficult period.

The Ministry of Industry and Trade said five more steel factories were being built with a total capacity of 1.5 million tonnes per year, bringing the national total capacity of steel to 11 million tonnes per year.

Meanwhile, steel imports still increased sharply in the first half this year, the association said. The imports had a year-on-year surge of 28.5 per cent in volume to 4.88 million tonnes and 13.7 per cent in value to $3.51 billion. — VNS

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