Southeast Asia steelmakers bid to emerge from China's shadow

Wed Jun 22, 2016 7:11pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By My Pham and Khettiya Jittapong

HANOI/BANGKOK (Reuters) - As a construction boom spurs steel demand across Southeast Asia, countries such as Vietnam, Indonesia and Thailand are challenging a flood of imports from China by retooling their steelmaking technology or imposing tariffs.

U.S. and European steelmakers are leading complaints over alleged dumping, but cheap Chinese imports account for two thirds of steel consumed in many Southeast Asian countries. The region includes six of the top 10 buyers of Chinese steel, and capacity utilization in its own mills has slumped to less than 40 percent.

While steel from China is expected to dominate for many years, swelling demand is driving efforts in countries like Vietnam and Indonesia to build more modern plants to better compete with China's vast mills.

"China is a major force with huge supply dominating the world, but we have solutions to deal with it," Tran Tuan Duong, general director of Vietnam's biggest steel firm Hoa Phat Group, told Reuters.

Hoa Phat aims to triple production capacity to up to 6 million tonnes over 5-10 years using modern blast furnace technology.

The local unit of Taiwan's Formosa Plastics Group has begun work on a $10.6 billion steel complex in Ha Tinh province with an initial annual crude steel capacity of 7 million tonnes, although this month's planned start-up of the initial phase has been delayed by an environmental dispute.

TRADE TENSIONS   Continued...

A man works at Hoa Phat steel mill in Hai Duong province, Vietnam June 14, 2016. REUTERS/Kham