The Ministry of Finance has issued an official letter (58/2009/TT-BTC) to increase the rates by 3 per cent to reach 8 per cent by tomorrow.

Pig iron and construction steel tariffs will rise by 15 per cent. Rolled steel products will rise by 1 per cent to hit 8 per cent.

The tariff increases follow a big decline in Viet Nam’s steel sales to about 698,000 tonnes in the first quarter of this year - 30 per cent lower than for the same period last year.

VSA vice-chairman Nguyen Tien Nghi said the decline was due to lower demand during the global economic crisis and less consumption of steel on the domestic market, partly caused by cheap imports.

In the first quarter, domestic steel makers produced 761,000 tonnes, a decline of 24 per cent compared with the same period last year.

A total of 220,000 tonnes of construction steel and 390,000 tonnes of pig iron were put in store. Most imported steel product comes from China, South Korea, Russia and ASEAN countries.

The imports from ASEAN and China have been selling at cheaper prices than the domestic products because of a zero preferential import tax rate.

Even though it costs more, customers are choosing South Korean and Russian imports because of their high quality.

Stockpiled steel at Nha Rong Port in HCM City. The Viet Nam Steel Association has succeeded in persuading the Government to increase the tax rate for imported steel products to protect the domestic steel industry. — VNA/VNS