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 5.6 million t/year, 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 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 comments. The restart of the furnaces has not been scheduled but Hoa Phat could resume operations in the third quarter of 2023, informed sources say. The company plans to commission Hoa Phat Dung Quat 2 Iron & Steel Complex, which will be installed with 5.6m t/y of additional HRC capacity, at end-2024.

Fellow Vietnamese steel mill Pomina Steel also shut down its 1m t/y design capacity blast furnace in late-September, according to informed sources. A restart 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 told Kallanish on Tuesday. The mill has told market participants it is now focused on the export market. There is however market chatter that the producer has reduced its rolling capacity by 30-40% and has been heavily stockpiling its slab instead.