The Epoch Times reported that the Vietnamese steel mill Formosa Ha Tinh Steel recently announced that its business may soon suffer from the influx of cheap Chinese steel, as Chinese steel companies are trying to shed excess production abroad, and that its plans to expand production, including a proposal to build another blast furnace that may be suspended as a result of such market changes. FHS Chairman Mr. Chen Yuan-chen said in an interview with the Nikkei: “We will carefully study the plan, as there is growing uncertainty about the prospects for the American war with China. The final decision on the third furnace can be made by the end of the year after negotiations with the three major shareholders of the company and the government of Vietnam. ”
Currently, FHS has two blast furnaces, which include the process of smelting iron ore to produce iron, which allows the company to produce 7.1 million tons of raw steel per year. The planned construction of the third blast furnace will increase its production capacity to 22.5 million tons per year.
Founded in 2008, Formosa Ha Tinh Steel is based in the Vung Ang economic zone in the central province of Vietnam Ha Tinh. FHS is the largest shareholder of Taiwanese plastics manufacturer Formosa Plastic with more than 70 percent share, followed by Taiwan Steel with 20% and Japanese JFE Steel with 4%.
Vietnam is one of those overseas markets that China is targeting, as the country is the largest consumer of steel in Southeast Asia. Contrary to the slowdown in the Chinese economy, Vietnam’s economy has grown strongly in recent years, with average GDP growth ranging from 6 to 7 percent. At the same time, steel consumption in the country increased from more than 10 million tons in 2013 to more than 22 million tons in 2018.
