Posted on 02 Jun 2022
A new steel mill project is being proposed in Vietnam, Kallanish understands. This will produce plate among other steel products.
Vina Roma Quang Tri Steel Joint Stock Company has put forward a proposal to install a 4.5 million tonnes/year steel mill at Quang Tri, central Vietnam. The provincial government announced on 27 May that the proposed mill, Quang Tri Iron and Steel Complex, will produce construction and section steel, as well as steel plate using European technology.
The steelworks, which will be built over five years and occupy around 463 hectares in Trieu Phong district, will involve investment of around VND 47,000 billion ($2 billion) in total, split into VND 15,000 billion, VND 9,000 billion and VND 23,000 billion in each respective phase.
The first phase is due to commence 2.5 years from the date of investment approval, followed by the second and third phases.
Industry sources are surprised by the announcement and question the financing behind the project. The leading investor is reportedly involved in the power sector.
"It could worsen an already over-capacity situation,” a source in Hanoi says. According to the Vietnam Steel Association, national apparent steel consumption is 24m t/y, while crude steel production capacity is 25m t/y. Including Hoa Phat’s planned expansion of 5.6m t/y (see separate HRC report), this will push Vietnamese crude steel capacity to exceed 30m t/y. But the source notes that not all announced proposals for new steel mills come to fruition.
But a trader disagrees. "A plate mill is okay because there is no plate production in Vietnam now,” the trader in Ho Chi Minh city says. He notes that steel production overcapacity is mostly for long products.
Meanwhile, the plate import market is currently very slow in Vietnam. "Demand is very weak," a trader in southern Vietnam says. Chinese origin 12-40mm thickness A36 grade plate is recently offered at $800-805/tonne cfr Vietnam.
Source:Kallanish
