Posted on 09 Nov 2022
Two Vietnamese companies have switched off their blast furnaces in order to minimise financial losses, Kallanish notes.
Vietnam’s Hoa Phat Group will close down two blast furnaces at Hoa Phat Dung Quat this month and plans to also stop operating a third blast furnace at the plant next month. There will only be one blast furnace left operating which will result in production of around 140,000 tonnes/month of hot rolled coil and construction steel. The Dung Quat steelworks has a finished steel capacity of 5.6m t/y comprising 3mt of HRC and 2.6mt of construction long products.
The company also suspended operations this month of two blast furnaces at Hoa Phat Hai Duong which has an installed 2.2m t/y capacity of construction long products. This will reduce the plant’s operations by two-thirds as there will be one remaining blast furnace operating. The company views the closures as necessary for its survival during the current downturn in the steel industry.
Running the blast furnaces was not sustainable, a Vietnamese industry source says. He notes that the company still has a large overhang of stocks. “So losses will continue as long as the construction and real estate sectors are not recovering,” he says. The restarting of furnaces is not planned but Hoa Phat could restart operations in the third quarter in 2023, informed sources say. The company has been planning to operate Hoa Phat Dung Quat 2 Iron & Steel Complex, which will be installed with 5.6m t/y of additional HRC capacity, in end-2024.
Another steel mill, Pomina Steel also shut down its 1m t/y design capacity blast furnace in late-September, according to informed sources. A restart for this company's blast furnace will depend on the market situation and the Vietnamese government’s policy on easing current stringent credit and liquidity restrictions, an industry source says.
The other main blast furnace operator in Vietnam, Formosa Ha Tinh, has no plans to shut down its blast furnaces, a company source tells Kallanish on Tuesday. The mill has told market participants that it was focused now on the export market. There is market chatter though that the mill has reduced its rolling capacity by 30-40% and that the company has been heavily stockpiling its slab instead.
Source:Kallanish
