According to the Vietnam Steel Association (VSA), the local construction steel industry turns out about 11 million tons annually while the country only consumes 5.5 million tons a year.

Speaking at a meeting on Monday, Nguyen Manh Quan, director of the Heavy Industry Department under the industry ministry, said that the ministry this year only calls for investment into steel billet production. The ministry will consider not granting investment certificates to rolled steel projects given the local supply far exceeding the demand, he said.

Pham Chi Cuong, chairman of VSA, noticed despite the fact that many local steel plants only operated at 60% of capacity, one more construction steel plant with an annual capacity of one million tons will be active this year. Furthermore, Formosa steel plant in Ha Tinh Province will come onstream with a capacity of one million tons a year in 2015, he added.

The industry ministry on January 31 approved a development zoning plan for the steel production and distribution system.

Under the plan, the nation by 2020 will remove small-scale cast iron and steel billet plants and rolled steel production lines, exclusive of cast iron furnaces for the mechanical industry and stainless rolled steel and high-quality steel production lines.

The nation from 2013 will not license new projects having backward technology, causing environmental pollution and wasting energy.

“The zoning plan of the steel industry is in the right direction, but problems rest with the issuance of investment licenses and the project’s supervision, resulting in many steel plants failing to run in full swing," Cuong stressed.