Many steel mills reduce their steel roll output or temporally stop producing because of Chinese steel rolls swiftly flow in with the much lower price up to millions of dongs per ton. Mr. Dao Dinh Dong, Sales Deputy Manager of Southern Steel Corporation says that constructing steel market is now changing unpredictably. Chinese steel is flooding the domestic market.
 
Facing this problem, many domestic companies do not know what to do but reduce selling price of steel rolls to maintain market segment but the condition does not improve.

Chinese steel is everywhere.

Getting the information from enterprises in steel industry, we studied the market in Ho Chi Minh City. The result is obvious. Chinese steel rolls appear everywhere, especially in building material stores in the suburbs such as Binh Chanh, Binh Tan, Hoc Mon, Thu Duc, and so on.In the urban areas of the City, in Ly Thuong Kiet building material market (District 10), this kind of product is sold in most stores.

Chinese steel is displayed in small quantity but if no matter how much the customers want, they will be satisfied with the term “delivery right to the customer’s place”. Mr. Thanh, a steel seller in Ly Thuong Kiet reveals that customers of Chinese steel are mainly contractors. The sellers will deliver the product right to the construction site. (…)

According to Mr. Pham Chi Cuong, the Chairman of Vietnam Steel Association, the quantity of Chinese steel rolls in Vietnam is now so massive that it has great effects on domestic production. While in 2006, only 150,000 tons of Chinese steel rolls was imported into Vietnam (making up 16% domestic needs for steel rolls,) only in the first four months of 2007, the quantity reached at least 230,000 tons (making up 53% market needs)

At Ho Chi Minh City ports, the quantity of Chinese steel rolls imported has been rather high since the early of 2007, about 20,000 tons to 30,000 tons or even 35,000 tons each month. There are tens of enterprises importing Chinese steel to resell. Some large scale steel producers in the South have “child” companies importing this kind of product in bulk to sell. The selling price is now 8.4 million Dongs to 8.5 million Dongs per ton; about one million Dongs lower than domestic products.

Domestic steel gives up the “playing yard” then price reduces

Because of Chinese steel, 23 domestic steel producers have to reduce steel roll output among which are 7 to 8 ones have to stop producing this item for the time being. According to Vietnam Steel Association, since the early of the year, domestic steel output has reduced by about 10% in comparison with the same period last year while the total domestic consumption has increased by 12%. At the moment, there are about 60,000 tons of domestic steel rolls lying in the warehouse because they are unmarketable.

Domestic steel producers say that Chinese steel rolls flow into Vietnam more and more with rather low price making enterprises unable to compete and have to give up the “playing yard”, turning to concentrate on steel bar production. Some have to accept losses to reduce selling price but still unable to push up the consumption as high as before.

According to Mr. Dao Dinh Dong, steel rolls used to make up from 37% to 38% of his company’s total selling but since the early of this April, it has reduced to only about 18% to 20%. One week ago, Southern Steel Corporation had to reduce 150,000 Dongs in the selling price of per ton of steel rolls. Another large scale steel producer in the South also says that under the pressure of Chinese product, they have just decided to reduce their selling structure of steel rolls from 45% to 10%.