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Steel producers to be able to purchase dollars to import scrap steel   2009-08-03 - VNN

The Ministry of Industry and Trade has sent a document to the State Bank of Vietnam, requesting support in ensuring enough foreign currencies for steel producers to import scrap steel to serve domestic production.


Lacking dollars, ingot steel producers entreating Government for help


Chairman of the Vietnam Steel Association Pham Chi Cuong confirmed the information on July 31.


Prior to that, steel producers and the Vietnam Steel Association (VSA) sent a petition to the Prime Minister, calling for help as they are facing the risk of having to stop production as they cannot purchase dollars to import scrap steel.


Vu Hong Khanh, Chief Accountant of Dinh Vu Steel Joint Stock Corporation, said that he has been moving heaven and earth to arrange $4.5 million for the company to import scrap steel for domestic production. However, banks have closed their doors on him.

The problem lies in the fact that the list of imported commodities which have priority for the purchase of foreign currencies, promulgated by the State Bank of Vietnam, does not include scrap steel.


In the dispatch sent to the State Bank of Vietnam, Deputy Minister of Industry and Trade Nguyen Thanh Bien asked the State Bank to instruct commercial banks to sell foreign currencies to ingot steel producers so that the producers can import scrap steel to maintain domestic production.


The ministry has asked for enough foreign currencies to satisfy the import of some groups of products, including scrap steel, bar cast iron and coal.


A representative of the State Bank of Vietnam confirmed it received the dispatch from the Ministry of Industry and Trade. “The State Bank of Vietnam will consider the issue and issue necessary instructions in some days,” the official said.


Nguyen Tien Nghi, Deputy Chairman of the Vietnam Steel Association, said that ingot steel producers are anxiously awaiting the decision of the State Bank of Vietnam so that they can open letters of credit as soon as possible, as ingot steel prices are increasing in the world.


“In doing business, the time of making a deal is important. Therefore, we wish to have the decision of the central bank soon,” Nghi said.


In a letter to the Prime Minister, ingot steel producers emphasised that this was a risk much greater than those caused by the economic downturn and tax policies.

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