An expanding economy needs something solid to builds its foundations on.
There is a correlation between economic growth and steel consumption, Chu Duc Khai, vice chairman of the Vietnam Steel Association (VSA), said at a workshop last week, the Vietnam News Agency reported.
Faster economic growth means more steel will be needed to make everything from cars to buildings.
Given gross domestic product growth is forecast to hit 6.2 percent this year, the country’s rising demand for steel is likely to spur production by 10-12 percent in 2017.
Vietnam’s per capita steel consumption could grow further in the next few years from just below 300 kilograms today, said industry experts.
The Southeast Asian country plans to put as many as 10 steel projects into operation next year in an attempt to reduce its dependence on Chinese steel imports.
Statistics show that Vietnam’s steel imports currently account for around 60 percent of market demand. Steel imports soared 33 percent last year to 15.7 million tons, according to customs data.
The trade ministry estimates Vietnam will spend $15 billion annually on steel imports by 2020, and that this year the country will import about 17.5 million tons.
According to the VSA, Vietnam’s steel production has grown steadily this year despite inflows of cheap steel from China. The steel association expects steel billet production to grow by 20 percent and other steel products by 15 percent from last year.
Although Vietnam holds great potential in the fast-growing steel market, the trade ministry has recently ruled out 12 projects from the steel sector’s development plan until 2025.
According to VNExpress International – www.e.vnexpress.net