The two largest steel producers in Vietnam are planning to cut back production in the wake of falling domestic demand, SteelOrbis has learned from industry officials.
Specifically, Vietnamese producer Hoa Phat Group plans to cut its production of billet, wire rod and hot rolled coil (HRC) at Hoa Phat Dung Quat complex by around 15 percent, and quite possibly by even 20 percent. “At the same time, Hoa Phat Group requested suppliers to delay iron ore and coking coal shipments amid less pressure this time,” a market source stated. Besides, in December this year, the company plans to temporarily halt its HRC line, with a capacity of 3 million mt per year, to upgrade the production facilities.
Although over the first five months of the year Hoa Phat Group managed to increase its crude steel production by 10 percent year on year to 3.6 million mt, in May the company reported about a 10 percent drop in output to 200,000 mt. “The demand for steel pipes and galvanized steel is still slow, leading to lower consumption of HRC compared to the same period last year and previous months,” the producer officially stated.
At the same time, Vietnamese steelmaker Formosa Ha Tinh Steel has shared with SteelOrbis that, given weak demand for steel in Vietnam, it plans to reduce its production as well, but only by five percent. No other details have been announced so far.