Vietnam's leading steel mills want to expand the scope of production reduction

2022-11-21

Due to the contraction of export activities and the continued downturn of construction activities, the scope of production reduction of large steel mills in Vietnam may continue to expand. According to local media reports, after Hoa Phat shut down the operation of its four blast furnaces located in Hai Doung and Dung Quat provinces, another leading steel mill in Vietnam, Formosa Plastics Hejing (FHS) plans to implement the first phase of production reduction, that is, about 15% of the output. Formosa Plastics Hejing will try to maintain production in November and early December, and decide whether to close No. 1 blast furnace according to the market situation at the end of the year. In addition, Hefa is also considering shutting down another blast furnace in Dung Quat at the end of December, that is, by the end of this year, Hefa will shut down 5 of the 7 blast furnaces in total. According to the feedback of local traders, the production reduction of Hefa Steel will have a significant impact on the supply. Another importer revealed that the inventory level held by Vietnam's secondary dealers is low at present, but the sentiment of replenishing the inventory is still not high due to continued short selling. Last week, a Chinese exporter said that in the past month, the export orders of ordinary steel in South America, the Middle East and other markets have been considerable, but the import demand in Southeast Asia market has been sluggish, and the transaction has continued to be sluggish.

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