Three new steel plants starting production next month will add one million tons to Vietnam's annual output, putting even more pressure on the growing steel surplus, an industry official said.
Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association, said local demand is only around 5 million tons a year, but annual supply will reach 8 million tons when the three new plants, all in the northern region, begin commercial operations next month.
As a result, competition in the market will become much tougher, Nghi said, noting that local steel producers are also threatened by cheap steel imports.
Around 35,000 tons of steel products were imported to Vietnam every month in the first five months and they were VND500,000-700,000 per ton cheaper than local products, he said.
Steel consumption was estimated at 260,000 tons in May, down 14 percent from April. The decline in sales forced many steel producers to cut back on production and lower prices, Nghi said.