Mr Pham Chi Cuong chairman of Vietnam Steel Association said that the bankruptcy of many steel manufacturers in 2011 has led to a reduction of 25% to 30% in domestic production capacity.

Mr Cuong said that steel manufacturers may only hope to obtain a modest growth rate of 3% to 4% in output in 2012. It is estimated that the total domestic steel output in 2011 was 7 million tonnes, with a decrease of 1% in comparison with 2010.

Meanwhile, according to Vietnam's Ministry of Industry and Trade, steel manufacturers have been keeping production at a moderate level in the last months of 2011, because they anticipated low demand. However, the country's steel output has exceeded demand due to difficulties relating to steel investment projects.

In order to ease overproduction, steel manufacturers have been trying to export steel. About 2 million tonnes of steel were exported in 2011, worth nearly USD 2 billion. On the other hand, Vietnamese exporters have been facing difficulties in the export markets, including the antidumping lawsuits.

It is expected that investments in steel projects in Vietnam, both by domestic and foreign investors, will slow down over the next 5 years at least.

(Sourced from Steel Orbis)
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