Vietnam will face a shortage of scrap steel for the production of billets after five new steel billet plants become operational by 2005.
To develop its steel industry, the country needs to import more scrap steel, from which 75 percent of billets are now made, the Vietnam News Agency quoted Director of Ferrous Metal Institute Nguyen Van Sua as saying.
Vietnam, which provides its steel industry with some 300,000 tons of scrap steel each year, will be unable to ensure sufficient supply when the new steel billet plants start running in 2005. The country planned to annually turn out 1.5 million tons of billets from that time on.
Importing more scrap steel seems a feasible solution, but it is facing an obstacle due to the disputes between the Ministry of Industry and the Ministry of Natural Resources and Environment over the quality of scrap steel.
Local environmentalists oppose importing scrap steel, especially in the form of old ships, fearing that the country will become a rubbish dump. It imported 50,000 tons of scrap steel in 1998, 170,000 tons in 2000 and 261,389 tons in 2002.
Vietnam, whose steel industry has a total capacity of 4 million tons, is expected to produce 2.8 million tons and import 2.3 million tons of billets this year.
Billet prices have so far this year risen by $20 per ton to $306 per ton due to the Iraq war, the Vietnam Steel Association said.