Electricity price increase will happen to the steel industry?


Investment licensing steel spill?


According to "steel industry development plan for 2007-2015 Vietnam, taking up to 2025" by the Prime Minister for approval, our country set a target to produce 15 in 2020 to 18 million tons of steel, including 80-10 million tons of flat steel, long steel 7-8 million tons for domestic use and export. This means, with a total capacity of steel mills throughout the country until 2009 to reach about 8 million tons per year, investment in steel industry only achieved a maximum capacity of 10 million tons per year is appropriate.



According to the Vietnam Steel Association (VSA), so just invest in building two plants combined, each with a capacity of 5 million tons per year is balanced enough to - the planned development. But in reality, the investment boom in the steel industry in Vietnam, especially in the two years 2007-2008 was too far. Review results of the Ministry of Industry and Commerce in 2009 shows that have appeared dozens of projects outside the plan, of which 24 projects by the local licensing authority over investment. The investment licensing steel spill caused only a total design capacity of the project outside of this planning has reached 60 million tons per year. There are businesses (DN) within two months have been signed with two foreign partners to build two plants with combined capacity of 5-10 million tons per year.



Steel consumption market in Vietnam and other countries in the region are limited, if large-scale projects to go into production will be made available over three times the demand, creating fierce competition and can bring many factory to bankruptcy. Not to mention, the investment in excess of the steel industry is planning to unbalanced economic development planning - social and environmental protection in localities such as energy (electricity), infrastructure (ports, road, rail), environmental pollution (air, dust, waste water ...). Having too many steel projects will account for more agricultural land. Currently, each accounting for complex steel 1000 - 3000ha, not including the port area and industry support.



According to VSA, after three years of implementation as planned, but due to loose management (mainly due to the local licensing), has lead to widespread investment in the steel industry, supply exceeds demand. Consequently, two years, Vietnam's steel enterprises have to compete fiercely. So far, the design capacity of the factory steel for concrete structures (steel construction) of Vietnam has reached 8.5 million tons per year and production capacity has reached 5.5 million tons of food , while the current demand on the new just under 4 million tons per year. Steel tube production has reached 1.9 million tons per year, while demand for new levels of one million tons per year. Cold rolled steel (steel) have also reached 2.7 million tons per year, consuming only one million tons per year. Ton-plated, color-coating (for roofing) production reached 1.750 million tons, while consumption is 1.2 million tons ... Meanwhile, the types of steel that Vietnam lacks the steel for industrial production as alloy steels, stainless steel for mechanical engineering (machinery, shipbuilding) and hot rolled (as raw material for cold rolled).



Electricity prices would eliminate obsolete technology



Electricity prices in Vietnam lower than electricity prices and world regions. Low electricity prices were "encouraging" investors in the country and abroad together to find ways to hook into Vietnam all kinds of energy technology costs, to seek such benefits actually, is going to steel mills, cement supply has exceeded demand now, but continues to expand investment. According to VSA, the cost of electrical steel production accounts for only 5.5% in the price. Thus, the adjustment of electricity prices at market prices will contribute to eliminating the use of obsolete technology in steel production. Ingot and steel scrap consuming than 4-5 times the processing power and steel, averaged 600 kWh / ton. However, with advanced technology, the consumption of only about 350 kWh / ton.



Currently, 32 companies of the Association only four companies using advanced technology of the world, 10 companies have innovative technology, the rest are old technology. According to VSA, the price of coal, electricity, gasoline is determined by the fair market value will create fair competition, transparency contribute to the economy, to make economic profits, no state interest, the virtual loss . In the immediate future, to cope with serious risks power shortages in the dry season this year, the power sector and steel industry has agreed on policies, plans and solutions to ensure electricity supply for steel production. VSA will build a list of companies eligible to be priorities for further power production. These are companies using advanced technology or enhancements to apply science and technology of steel production savings and efficiency.