Formosa Plastics to Launch Vietnam Steel Plant in 2013

Formosa Plastics Group of Taiwan will finish first phase of integrated steel works with annual 3 million tonnes of raw steel output capacity in Vietnam in 2015, according to the construction contractor of Baosteel Group of China. Formosa Plastics eyes expansion to total 13 million tonnes at the works. The additional capacity would expand oversupply in Southeast Asia when Asian majors plan to launch new capacity in the region.

POSCO of South Korea will finish construction of integrated steel works in Indonesia in late 2013. Chinese Baoshan Iron & Steel and Wuhan Iron and Steel (Group) would export around half of production from new large steel works with each 5 million tonnes of output capacity in southern China, which will start operation around 2014-2015. The supply could get loose in Southeast Asia after the capacity expansion.

E United Group of Taiwan and JFE Steel launched feasibility study for integrated steel works in Vietnam. Vietnamese state run steel maker of Vietnam Steel eyes construction of blast furnace with annual 4.5 million tonnes of output capacity through joint venture with Tata Steel of India. Kobe Steel studies feasibility on new iron making plant with the original process, ITmk3 in Vietnam.

Steel demand increased by 4% to 50.5 million tonnes in Southeast Asia in 2011 from 2010. With annualized 5% growth, the demand could increase by 10.90 million tonnes to 61.4 million tonnes for 2015. However, Baoshan Iron & Steel and Wuhan Iron and Steel will increase the capacity at the new works by total 10 million tonnes per year in and after 2015. The capacity expansion by the steel makers could be more than the demand growth in Southeast Asia.