Two Vietnamese companies have switched off their blast furnaces in order to minimise financial losses, according to a report by media company Kallanish.
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 140kt/m of hot rolled coil and construction steel. The Dung Quat steelworks has a finished steel capacity of 5.6Mt/yr 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 said, noting the company still has a large overhang of stocks.
''Losses will continue as long as the construction and real estate sectors are not recovering.”Vietnamese industry source
So, losses will continue as long as the construction and real estate sectors are not recovering,” he commented. 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 1Mt/yr 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 credit and liquidity restrictions, reported an industry source.