Steel industry planning excess remains, missing still missing

More than ten years ago, the investment story "hot" in the steel industry has ever happened. By 2009, the Vietnam Steel Association (VSA) continues to give warnings about the state investment rampant excess capacity led to steel processing. The cause of the widespread licensing status stems from the "empowered" to localities. Moreover, the time, the local authorities are scrambling to attract, red carpet to invite foreign investment. So much steel industry at "miserable", fell into "breaking ball," "clinically dead", "overproduction". Practice has proved, many steel mills have closed, decommissioned by weak competition, lack of funds ... From this fact, in 2013, the Ministry of Industry and Trade has issued a decision approving the development plan production system and distribution system phase steel and 2020, with 2025 in favor investment in production of pig iron, steel billets from iron ore, some types of hot rolled steel products, alloy steel , Stainless Steel.

 

Until the present time, according to the VSA, with items common construction steel (rebar, rolled, shaped), total design capacity of the company now estimated at 12 million tonnes / year, but every in just over 7 million tonnes of consumption. Similarly, the ability to meet domestic billet at around 12 million tonnes / year, but consumption is also at only 6-7 million tons / year. "Themselves capacity, our power not to promote the better and excess is mainly due to domestic demand has not," said Ho Nghia Dung, Chairman of VSA admitted. Meanwhile, domestic companies still have to "fight", in competition with steel "guise" of alloy steel imports. Dung cited, billet of cheap imports from China have threatened the domestic steel plant, many factories forced to cut production, only about 50% of the remaining metallurgical plant operations.

 

Thus, steel production in the country has met the demand of construction steel, cold rolled steel, steel pipe, sheet metal plating and coating color. Calculation, the installed capacity has reached about 50% of consumption. The rest, Vietnam still has to import all kinds of fabricated steel is not as hot rolled steel, steel slabs, alloy steel, ...

 

In the context of many factories are not running at full capacity, the investment, adding plants in the planning is a problem a lot of people questioned. The problem of where to invest, how investors should also be taken into account when the ministers and senior officials of the country's leading steel producers the world met in the Belgian capital, Brussels, which seeks solve the crisis of excess steel supply current.

 

According to an expert in the steel industry, in the planning period 2007-2015 steel, with vision to 2025, then 2025, total national steel capacity reached 20 million tons / year. However, numbers alone steel projects licensed period 2006-2008 had a total capacity of 30 million tons / year, 1.5 times with zoning. It is noteworthy that, then many super licensing steel projects planned to take place consecutively makes supplements (eg Complex Lotus steel rolling Ca Na Ninh Thuan), the capacity is expected to to over 40 million tons / year.

 

Slow opening control: Missing

 

However, according to Truong Thanh Hoai, Director of the Department of Heavy Industry (MOIT), can the experts confused as community project according to the actual registration but some projects were not implemented, delayed compared with the planned deployment. Show number slower than planned deployment of 20 million tons. For example, project Quang Lien and Quang Ngai recorded investment certificates (5 million tons); United Steel 4 million tonnes in Ha Tinh, Quang Ninh project with 2 million tons of steel ... "So, from early 2015 to review the MOIT has steel operations and evaluation is lacking. By 2020 shortfall of about 17 million tonnes, including Formosa in operation as long as it is still lacking. 2025 will be 22-25 million tons of steel shortage, "said Hoai said.

 

Is it because so MOIT has "rushed" added some steel projects in the planning? In 2013 planning approval, the list of investment projects in Vietnam steel industry 2020 period, with 2025 launched the list 44 plants, plus 20 plants have been built in stages 2007-2012. However, not only Ca Na steel project in Ninh Thuan (total capacity of 16 million tons / year) is added that previously, there are many additional projects to increase the capacity but not subject to ... regulation planning. Specifically, the Ministry of Trade adjustment put the project "Nghi Son steel billet factory" to "steel complex project Nghi Son" by Iron and Steel Corporation Nghi Son (total design capacity of Phase 3 of 7 million tons / year, including 2 million tonnes of square billet / year, 5 million tons of billet flat / year). Or "expansion project increased the capacity to produce high-quality steel construction capacity of 600,000 tonnes / year of investment projects Complex Hoa Phat Steel production phase 1" by Hoa Phat Steel Joint Stock Company owns investors also are in the planning. These are only examples and many other projects have also been added to the plan.

 

Not discuss the effectiveness of the project, the gradual addition of the planned projects in the steel industry approved makes many people were "pressing". Mr. Ho Nghia Dung said that the steel industry has planned, but the implementation is not realistic. For example, iron and steel production complexes Formosa Ha Tinh also not included in the planning, but then still be included in the planning. Therefore, Dung suggested: "Do not manage by planning departments that need development-oriented. Accordingly, the state agency providing market information, development oriented, demand growth, the region's steel industry development priorities ... on the basis of that information, investors will know the choice. "

 

What investment?

 

To the question "Should investment continue to build steel plants or not?" The chairman of VSA said: "We still have to invest, but the problem is calculated, consider investing in phase pieces, time, scale and technology to control how the environment and ensure the competitiveness of products to market. " In the current period, VSA also discourage investment projects in the steel billet and long products by volume supply-demand gap is at large. But with products such as steel plates, cold rolled, hot rolled plates, special alloy steel, ... then the enterprise can balance development, invest more, because in this product group, we are development advantages, XK. Moreover, many products in this group, Vietnam can not be manufactured, imported each year about 5 million tons to cater to manufacturing products and domestic civil engineering.

 

Regarding management, he said, should be managed by a set of technical standards, steel producers want to achieve standards anywhere whether or scale of 1,000 tons, equipment standards and standards on environment. Besides, some combination formed 5 million tons by our modern technology existing but fragmented, scattered throughout the country, not concentrate, can not compete. These combinations can be set in areas where deep-sea port as Ninh Thuan, Ba Ria-Vung Tau, Quang Ngai ... But according to expert opinion Luu Bich Ho, many argued that coastal areas are not doing duplex steel projects are in countries like Korea, Japan, the steel project, petrochemicals are made at sea. The issue here is the need to ensure environmental remediation issues, to afford the technology to do. Furthermore, investment in the steel industry now needs to "look" fierce competition with China. "We in no way hinder the Chinese steel overflow into Vietnam because we have integration and reduction commitments under the roadmap," Mr Ho said.

 

One issue is quite sensitive to the steel industry are many experts mentioned the preferential policies. According to the expert, should not be preferential to the project to produce steel by steel producers not as hard as the other manufacturing industries. Therefore, there should be incentives for the mechanical engineering industry because the industry is not easy to recover capital. It is reported that recently the Deputy Prime Minister Trinh Dinh Dung also asked to encourage all economic sectors, the domestic enterprises to invest in production of pig iron, billet, steel products, production equipment for metallurgy, steel meets international standards; with investment incentives for the production of pig iron project, alloy steel, high quality steel from iron ore on a large scale; limited investment in production of domestic products fully meet consumer demand.

 

Source: Customs