Employees at work at a steel factory in the southern province of Dong Nai – Photo: Van Nam
In a report on the steel industry’s prospects in 2014 sent to the Daily on Thursday, Cuong, who is also former chairman of the Vietnam Steel Association, estimated the country’s economy to change for the better next year owing to State macroeconomic policies.
However, such policies have yet to tackle the current difficulties of local firms, with next year’s gross domestic product (GDP) growth projected at only 5.8%, meaning the deployment of new investment projects will be limited, he remarked.
The real estate market will still be frozen as the demand stimulus package worth VND30 trillion has failed to prop up the market, Cuong said.
Other major steel consumers such as shipbuilding, auto manufacturing and mechanical engineering are still far from prosperity, so steel consumption will barely increase next year, he noted. The sales volume of steel products is forecast to total 11.8 million tons in 2013.
Total designed production capacity of the local construction steel segment amounts to 11.3 million tons annually while its operational capacity is seven million tons a year, Cuong reported.
Local construction steel sale volume posts nearly five million tons this year, falling about 500,000 tons compared to the 5.5 million tons recorded in 2012.
As the local steel demand is to remain low next year, domestic companies will continue facing fierce competition and more enterprises will have no other choice but to close production when failing to compete with others with higher capacity and lower production costs.