Steel producers said that they cannot sell steel because banks have tightened credit, while a lot of key construction projects have been delayed, which has led to a serious decrease in demand.

Meanwhile, steel producers have been poor in forecasting the market and prices, because of which they have not taken initiative in production and finances.

The producers have urgently called for the state to help settle the problems in order to rescue domestic production by providing capital for construction projects, and lowering lending interest rates so that investors can resume the implementation of projects. Moreover, they want banks to expand their credit limits, and sell foreign currencies to enterprises at reasonable prices.

A lot of steel producers have also proposed that the state raise the import tax in order to protect local steel producers. Ingot steel producers have asked it to raise the import tax on ingot steel from 2% to 25% and proposed raising the import taxes on many other types of steel.

While steel producers are insisting on tax increases, considering this the only solution to rescue local production, analysts have warned that the move will affect consumers’ benefits. They say that the benefits of involved parties, enterprise, state and consumers need to be harmonised.

A representative of the Vietnam Steel Corporation said that Vietnam still has to import 80% of its demand for ingot steel. Therefore, the tax increase, if approved, should only exist for a short time, as the long-term benefits of steel producers need to be considered.

Cao Lai Quang, Deputy Minister of Industry and Trade, said that the first thing enterprises need to do is to check and reconsider their business strategies, seek solutions to reduce production costs. Quang has promised to ask the government to speed up the implementation of construction projects, which is believed would help push up steel consumption.