VietNamNet Bridge reported that the Vietnam Steel Association has asked that the government bans export of iron ore so that local companies can use it for production.

The appeal comes as at least four companies have stopped producing steel ingots because they are sitting on huge stockpiles that remain unsold although prices are falling. Vietnam presently has nearly one million tons of steel ingots worth USD 1 billion in stock

Mr Dinh Huy Tam general secretary of VSA said that steel prices have dropped very quickly and producers ae caught between decreasing domestic demand and the government’s unreasonable tariffs.

Suggesting the ban on iron ore exports, the association said many steel producers have built blast furnaces to produce pig iron since the demand for iron ore has increased more and more. VSA said that “Just three companies: Hoa Phat, Van Loi and Dinh Vu, each needs millions of tonnes of iron ore per annum.”

The Finance Ministry had last Monday cut export tariffs on steel products to 10% against 5% proposed by the Ministry of Industry and Trade.