“Vietnam has a big problem with inflation and apparent steel consumption growth may slow to 15 percent,’’ Jati Santiono, senior technical manager at the Southeast Asia Iron & Steel Institute, said Tuesday.
Demand surged 43 percent in 2007 to 10.2 million tons.
Prime Minister Nguyen Tan Dung is trying to restrain consumer prices that rose 25.2 percent last month by putting the fight against inflation ahead of promoting economic growth.
The central bank has raised borrowing costs to the highest since 1998.
“They have to tighten policy much more sharply,’’ Irene Cheung, a strategist at ABN Amro Bank NV, said Tuesday in an interview on Bloomberg Television.
“Their inflation rate is much higher. In the case of Vietnam, it’s 25 percent.’’
Vietnam will cut state spending 10 percent this year to cool price gains, Minister of Planning and Investment Vo Hong Phuc said last Friday.
State-owned enterprises must get prime ministerial approval to invest in property or financial markets, according to an announcement Monday.
Steel demand in Thailand and Malaysia may also suffer, Santiono said at a conference in Singapore.
“The Malaysian government announced they may cut mega projects, so demand will fall,’’ he said.
“In Thailand, things are not settled politically, which may affect demand.’’
Thai steel demand was stagnant at 12 million tons last year and may not improve this year, he said.
Steel sales in Malaysia may rise 7 percent this year, less than the 10 percent gain to
8.5 million tons last year, he said.
Indonesian demand may rise 10 percent this year, following last year’s 12 percent rise to 7.1 million tons, he said.
(Source: www.thanhniennews.com)