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The Government has raised import taxes on steel to protect the domestic industry.

The tariffs on ingots and construction steel will go up by 3 percent to 8 percent and 15 percent respectively and on rolled steel by 1 percent to 8 percent.

The Ministry of Finance said global steel prices have fallen relentlessly in the last three months, with many countries lowering prices to boost exports, making it tough for Vietnamese steel producers to compete.

The new tariff takes effect on April 1.

The tariff hike follows a petition from the Vietnam Steel Association to the ministries of Finance, and Industry and Trade asking for such a move.

It said domestic steel producers face bankruptcy since cheap imports are flooding the market.

Association chairman Pham Chi Cuong said steel ingots imported from Russia and Ukraine now cost around US$330 a ton, US$100 lower than at the end of February.

He said domestic ingot producers cannot compete since even scrap steel, the main raw material for making ingots, costs around US$255 a ton. The finished product costs around US$430.

Several ingot producers are running at 30-40 per cent of capacity, he said, with several others even suspending production.

Traders estimate imports of rolled steel in the first two months at 60,000 tons, with the products coming mainly from ASEAN member-countries, Russia, and South Korea.

The association’s statistics put local production at 240,000 tons, down 16 per cent from the same period last year, and sales at a mere 220,000 tons, or 26 per cent down.

Domestic producers had a stockpile of 300,000 tons of ingots and 200,000 tons of finished products at the end of February.