Vietnam’s Hoa Phat temporarily shuts blast furnace after fire

The Vietnamese steelmaker Hoa Phat Group is evaluating the impact of the fire that broke out on May 9 at its Dung Quat Iron and Steel Complex, a mill source said on May 15.

The company has temporarily shut one of its four blast furnaces due to this incident, but the expected impact is minimal.

Repairs at the blast furnace would likely take one to two weeks, he added.

"It's a minor fire incident...we're still assessing the impact. It shouldn't affect this month's allocation by much," the source said.

Market participants said the fire was caused by a molten pig iron leak, though the mill source did not confirm this.

Vietnam-based traders said that the two-week shutdown would cut billet production by around 50,000 mt and hot-rolled coil production by around 54,000 mt.

"But the mill should have enough inventory to tide it through this downtime. I think a one-to-two-week shutdown shouldn't be so significant," a Vietnam-based trader added.

Some sources said the incident might support billet prices in the near term amid tighter supply availability.

No billet offers from Hoa Phat were reported on May 15, though its wire rod offers were heard to hold steady at $540/mt FOB Vietnam for the July shipment.

The mill was offering rebar B500B at $535/mt FOB Vietnam in actual weight for July shipment.

For scrap, market participants said there would likely be limited impact on pricing sentiment given the relatively small-scale nature of the incident.

However, a trader also added a caveat that "the incident might also see muted demand for deepsea HMS 80:20 bulk scrap cargoes in the near term, considering the mill's position as one of the larger buyers of deepsea scrap in Vietnam."

Sources said Hoa Phat's hot-rolled coil allocation might be affected, especially considering its competitive offers this month. The mill slashed its monthly domestic offers by $10/mt on May 5 amid then-brewing geopolitical tensions and weak domestic demand in Vietnam.

The mill was offering SS400 and SAE1006 coils without skin pass at Dong 13,360/kg, or $514/mt, CIF North and Central Vietnam for June shipment.

The company offered South Vietnam Dong 13,390/kg, or $515/mt CIF.

The mill source said its offers have received a good response from the market, as most buyers are looking to domestic mills for supply.

The source attributed this primarily to fears that the scope of the antidumping duty will be expanded to include wider-width material, which buyers have bought as a workaround since the temporary AD duty was imposed.

"Not many buyers want to take the risk of importing right now; most are in discussions with us," the source added.