return icon

High risk of bankruptcy exists for iron & steel manufacturers

VietNamnet Bridge - Iron & steel manufacturers can anticipate a tough year 2016, when low-cost products, especially from China, will flow to Vietnam.
VietNamnet Bridge - Iron & steel manufacturers can anticipate a tough year 2016, when low-cost products, especially from China, will flow to Vietnam.


According to the Vietnam Steel Association (VSA), in 2015, Vietnam imported 19.83 million tons of steel, including 9.6 million tons from China. 

VSA has also reported that the ingot steel imports in the first months of 2016 were double the imports of same period last year, forecasting that the total ingot steel imports in 2016 would increase by twofold.

It has warned that the domestic ingot steel would be dominated by imports by 2017, and if so, a series of domestic enterprises would go bankrupt.

Le Phuoc Vu, president of Hoa Sen Group, said at the year-end meeting with customers that the total consumption of domestic enterprises in 2015 was 2.6 million, down by 20 percent, or 500,000 tons compared with the year before. This means that the enterprises lost VND9.3 trillion.

Iron & steel manufacturers can anticipate a tough year 2016, when low-cost products, especially from China, will flow to Vietnam.
Pham Chi Cuong, former chair of VSA, noted that for every 2 million tons of ingot steel imports, 4-5 steel mills would have to shut down, because the volume is the output of 4-5 plants.

About 1.9 million tons of ingot steel is imported to Vietnam a year, while the total capacity of domestic steel mills is 12 million tons a year. 

Vietnam imports 1.6 million tons of rolled steel, while domestic mills can churn out 1.1 million tons.

Nguyen Thanh Trung, CEO of Ton Dong A JSC, commented that the 25-30 percent export growth prove to be acceptable, but the 50 percent increase is ‘really worrying’.

The problem is that Chinese steel products have been sold very cheaply in Vietnam at prices even lower than the Vietnamese enterprises’ production costs, though most of them have low quality.

Steel manufacturers have reported unsatisfactory business results for the fourth quarter of 2015. 

Tien Len JSC had revenue increasing slightly by 11.2 percent, but reported profit of minus VND127 billion because of the capital cost increase of 27.7 percent. 

The HCM City Metal JSC also reported a loss of VND39 billion, while it made a profit of VND5 billion in the same period last year. Viet Y Steel took a profit of VND26 billion.

Exporting steel to the US

While many businesses keep complaining about difficulties, Hoa Phat and Hoa Sen still can make stable profits. Analysts say exports can help them achieve success.

Hoa Sen last week exported 20,000 tons of sheet metal to the US, worth $10 million. Tran Tuan Anh, Deputy Minister of Industry and Trade, said that this was a breakthrough for the corporation and the steel industry in general.



Moody’s upgrades ratings of eight Vietnamese banks

VGP - Moody's Investors Service, a leading provider of credit ratings, research, and risk analysis, has raised ratings of eight Vietnamese banks.

MOIT: electricity prices to be set by March 31

The Ministry of Industry and Trade (MOIT) has asked the Electricity of Vietnam (EVN) to negotiate with solar and wind power project developers and reach agreements about electricity prices prior to March 31.

Sapa mother fined for forcing her children to work

A woman in the northern tourist town of Sapa has been fined VND 22 million for forcing her two small children to sell products to tourists in the area.


Vietnam works hard to boost exports to Chinese market

Bamboo Airways wants to add VND10 trillion to charter capital

Bamboo Airways is planning to increase its charter capital by nearly VND10 trillion through a new share issue to restructure its debt and fund its business operations.

Vietnam's first community digital library to open in Quang Nam

The central province of Quang Nam's Tam Ky City’s first community digital library in Vietnam will open soon.

White List of certified websites released

The Authority of Broadcasting and Electronic Information under the Ministry of Information and Communications has announced on its website the White List of certified websites.


Japan invites Vietnam to G7 Summit, says deputy spokeswoman

Gains feasible through large-scale FDI

Vietnam’s foreign capital perspective is being pressured by incentives from other nations to encourage their own investors to return home.

Vietnam and Israel to sign labour cooperation agreement this year

Vietnam and Israel have agreed to sign a labour cooperation agreement in 2023, with a view to bringing Vietnamese labourers back to work in Israel in the field of agriculture.

Ministry proposes amending visa policy

The Ministry of Public Security (MPS) will propose to the National Assembly adding an amendment of the visa and e-visa policy to the National Assembly’s general resolution at the nearest upcoming session (May 2023).

EVN urged to finalize renewable electricity prices by end-March

The Ministry of Industry and Trade has requested the Vietnam Electricity Group (EVN) to complete pricing talks on solar and wind power with investors before March 31 to put 85 power plants into operation.

Deputy PM Tran Luu Quang heads special task force

Prime Minister Pham Minh Chinh has signed a decision assigning Deputy Prime Minister Tran Luu Quang as head of the special task force in charge of dealing with problems faced by investment projects.

Vietnam sorry about US’ flawed report on its human rights situation: Foreign ministry

Vietnam on Thursday said the newly released United States' Human Rights Report contains "biased comments" that are based on false information about the real situation in the country.

Vietnamese top female badminton player jumps to world's Top 40

Vietnamese top female badminton player Nguyen Thuy Linh has advanced to the top 40 of world rankings after coming second at the Thailand International Challenge 2023.