Risk of bankruptcy from steel businesses

While the domestic businesses are confused with the abundant steel, the risk from the cheap price steel in China is coming. It is predicted that there will have 20% of steel businesses in the bankruptcy in 2012.

According to Mr. Pham Chi Cuong, President of VSA, the quantity of construction steel in the first six months is nearly 2.62 million tons, reduced 17% over the last same period. The slow consumption in steel is due to the difficult of economic, the buildings have to postpone or stop.

The situation of steel has never been worse than in this time.

Due to the big abundant, many businesses have to reduce their productivity, such as Thai Nguyen steel, Pomina, Hoa Phat, etc.

The representative of VSA said that: “In 70 steel businesses, there have 5 – 6 ones die. That means they have no products during those last months. The others are very difficult. Somewhere, the employees have only 70% of salary”.

b2b vietnam - Vietnamese steel brand (2)

Mr. Tran Tuan Duong warned that the situation of consumption in steel is still negative during 2012 and even 2013. Now, China has about 700 million tons of steel, makes up 50% of the total steel quantity all over the world. However, the real estate of China is having many troubles, it means that, the possibility of abundant steel is high.

In this difficult circumstance of Vietnamese steel, many experts call for Vietnamese businesses to unit and support each other. It is likely that Chinese enterprises will dump. Thus, Vietnam office agencies can apply the technique and also tax barrier to prevent China’s advance.