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Vietnam's steel market appears to be turning the corner in the third and fourth quarters of this year due to an acceleration of public disbursement and the government's pledge of fresh credit to developers of social housing projects, Vietnam News reported on Tuesday.
As Vietnam's economic growth is expected to pick up in the year's remaining quarters, the steel industry is likely to recover on improving demand, said Doan Danh Tuan, deputy chairman of Vietnam Steel Association (VSA).
Domestic steel demand is forecast to grow 21 percent to 290 kg per capita by 2030 from the current 240 kg per capita with demand concentrated on alloys or high-quality steel, according to the association.
The industry is also supported by government stimulus efforts to salvage a troubled property sector that has struggled with defaults and stalled projects since last year, leading to dwindling investments from developers and home buyers, hence, a sharp contraction in construction spending.
Vietnam's parliament has approved an economic support package worth 350 trillion Vietnamese dong (15 billion U.S. dollars), of which 33 percent is funneled into infrastructure development projects, including trans-Vietnam expressway, the Long Thanh International Airport outside Ho Chi Minh City, and other investments in infrastructure across logistics, sea ports.
The government in February also passed a credit package of 120 trillion Vietnamese dong (5.1 billion U.S. dollars) to develop social housing projects.
All these factors will support a surge in steel consumption in the third and fourth quarters of this year, the VSA added.
Vietnam's largest steel maker Hoa Phat said the most difficult period for the steel industry may be over and hoped the government's efforts to accelerate public investment would give the industry a boost later in the year.
Hoa Phat's production rose 6 percent in March to 440,000 tons of crude steel from the prior month while total sales of billet, construction steel and hot rolled coil reached 500,000 tons, up 5 percent month-on-month.
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- [Editor:kangmingfei]
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