The Taiwanese-invested Formosa Ha Tinh Steel Corporation (FHS) will adjust its production plans for the remaining months as demand declines in the U.S. and European markets, a company representative said.
Responding to reports that FHS, based in the central province of Ha Tinh, would cut production by 15% as a result of global steel oversupply, the representative said that the company has not announced any production cut.
"Instead, the firm will adjust its production plans to suit the global steel demand, as well as to stabilize steel prices in the Vietnamese market," he said. He did not elaborate.
The rep reiterated that the production adjustment was needed given the oversupply of steel in the global market and low import demand from the U.S. and Europe.
A Ha Tinh leader told The Investor that FHS had adjusted its steel prices and output since July due to decreased demand of Vietnam and international markets and high inventories.
Located in the province’s Vung Ang Economic Zone, FHS is one of the biggest foreign-invested projects in Vietnam to date. With a total investment of nearly $13 billion, it employs some 7,000 workers including 6,200 Vietnamese, of whom around 78% are locals.
The company has reported that its steel output reached 6.5 million tons in 2021, up 500,000 tons from the previous year. The figure stood at 3.22 million tons in the first half of this year.
Last year, FHS’s revenue was $5.3 billion, equivalent to 1.5% of Vietnam’s GDP, and it earned profits of $1.2 billion. The revenue and profit figures for the first six months of this year were $2.7 billion and $270 million, respectively.
In the first nine months of the year, steel production in the country reached over 20.8 million tons, down 5.8% year-on-year, while consumption was nearly 19.3 million tons, down 1.6%, according to the Vietnam Steel Association (VSA).