VietNamNet Bridge - When Minister of Industry and Trade Tran Tuan Anh on November 15 at a National Assembly q&a session denied there were special group interests in licensing the Ca Na steel complex project, the ministry’s website showed information that indicated support for large-scale steel projects.

On the website and in a document sent to press agencies, the Ministry of Industry and Trade (MOIT) said that it is the right time for Vietnam to develop a steel industry.

The ministry predicted that Vietnam would lack 20 million tons of steel by 2020 and 25 million tons of raw steel by 2025, warning that if Vietnam does not make steel, the trade deficit would even be more serious.

According to the ministry, with current production capacity, Vietnam can satisfy 100 percent of domestic demand for ingot steel and structural steel. The total designed capacity of operational mills is about 11 million tons per annum.

However, the total capacity of the mills with capacity of 500 tons per annum and higher is 8 million tons only. The other mills, which can churn out the remaining 3 million tons, all are small and run with outdated technologies which consume a lot of energy and make uncompetitive products.

It is expected that by 2020, Vietnam would need 6 million tons more of steel capacity with high competitiveness to satisfy domestic demand.

MOIT predicted that Vietnam would lack 20 million tons of steel by 2020 and 25 million tons of raw steel by 2025, warning that if Vietnam does not make steel, the trade deficit would even be more serious.

Regarding hot rolled coil (HRC), Vietnam has only one project – Formosa Ha Tinh – designed to run with the capacity of 7.5 million tons and uses a blast furnace with capacity of 4530 cubic meters. Once operational, it will be the first steel complex in Vietnam which can make HRC products and help change the face of the Vietnam’s steel industry.

However, the environment scandal in May 2016 which caused the mass fish death in the central provinces has delayed the project implementation.

As no more HRC projects are under implementation, HRC imports are expected to continue rising in the time to come.

In fact, three large projects were licensed, but Formosa Ha Tinh is the only one which has been implemented. The other two have had their licenses revoked as investors did not move ahead with the projects. These included the Ca Na steel project, registered by Lion and Vinashin, and the 100 percent Taiwanese-invested GuangLian Dung Quat.

Developing steel projects is a delicate issue for now. Any new steel project can raise long debates from the public. 

Meanwhile, economists believe that Vietnam should not develop more steel mills once the existing mills can satisfy domestic demand.

PL TPHCM