A plan by the four major units of Formosa Plastics Group (FPG, 台塑集團) to lower their stakes in a steel mill in Vietnam reflects the group’s caution about global demand, analysts said yesterday.
“As China, one of the world’s largest steel buyers, will no longer pursue high economic growth, global steel demand could slow down accordingly,” Hua Nan Securities (華南永昌證券) analyst Henry Miao (苗台生) said.
In the second quarter, China’s economy grew 7.5 percent year-on-year, slowing from a 7.7 percent increase in the first quarter.
Beijing expects GDP this year to grow by 7.5 percent, compared with a 7.7 percent increase recorded last year. Chinese authorities have said the country wants a more balanced economy rather than simply seeking high GDP growth.
“I think FPG has taken possible lower demand from China into account and decided to cut its stake in the steel investment project in Vietnam,” Miao said.
The group’s four major units — Formosa Plastics Corp (台塑), Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fibre Corp (台灣化纖) and Formosa Petrochemical Corp (台塑石化) — said on Thursday that they each decided to cut stakes in Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業) to 14.75 percent from 21.25 percent.
Before the adjustments, the subsidiaries had poured US$744 million each into the
Vietnam steel project, which is still under construction. It is scheduled to become operational in the second half of 2015 with an annual production capacity of 7 million tonnes.
After the reductions, the four investments in the Vietnam project are expected to be worth US$516 million each.
The group said the four subsidiaries are expected to see their financial burdens eased due to the smaller investments. It added that because steel production is not their core business, they aim to introduce partners in the global steel industry to help them push the Vietnam project forward.
Media reports said FPG plan to introduce foreign partners such as Nippon Steel Corp to the project.
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
‘DRAMATIC AND POSITIVE’: AI growth would be better than it previously forecast and would stay robust even if the Chinese market became inaccessible for customers, it said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its full-year revenue growth outlook after posting record profit for last quarter, despite growing market concern about an artificial intelligence (AI) bubble. The company said it expects revenue to expand about 35 percent year-on-year, driven mainly by faster-than-expected demand for leading-edge chips for AI applications. The world’s biggest contract chipmaker in July projected that revenue this year would expand about 30 percent in US dollar terms. The company also slightly hiked its capital expenditure for this year to US$40 billion to US$42 billion, compared with US$38 billion to US$42 billion it set previously. “AI demand actually
RARE EARTHS: The call between the US Treasury Secretary and his Chinese counterpart came as Washington sought to rally G7 partners in response to China’s export controls China and the US on Saturday agreed to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid another damaging tit-for-tat tariff battle. Beijing last week announced sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100 percent tariffs on imports from China in retaliation. Trump had also threatened to cancel his expected meeting with Chinese President Xi Jinping (習近平) in South Korea later this month on the sidelines of the APEC summit. In the latest indication of efforts to resolve their dispute, Chinese state media reported that
RSS