UPDATE 2-Voestalpine says acted legally in communicating Texas plant costs

* Financial watchdog FMA examines plant costs

* Voestalpine says informed investors according to law

* Costs for Texas plant increased by around one-third (Adds comment by financial watchdog, details, background)

VIENNA, Feb 1 (Reuters) - Austrian specialty steelmaker Voestalpine said on Wednesday it had complied with all legal requirements in the way it communicated cost overruns at its plant in Texas.

Austria’s financial watchdog FMA is investigating whether Voestalpine met European Union requirements to immediately publish information relevant to its share price in connection with the cost overruns.

The group announced plans to invest 550 million euros ($591 million) in a state-of-the-art plant in Corpus Christi, Texas in 2013, its largest foreign investment so far.

It said last week that the cost for the plant, which began production in October, would rise to about $990 million.

Over the past months, Voestalpine repeatedly said the Texas plant would be more expensive than initially thought but did not publish specific figures.

“We have no doubt that we informed (the market) in compliance with the law,” the company said in a statement.

The FMA will refer to the new European Directive on Market Abuse, which took effect across the European Union in July and allows larger fines than previous national legislation, a spokesman said.

Under the new directive, a company can be fined up to 2.5 million euros or 2 percent of its annual revenue for a breach of disclosure requirements. Voestalpine’s 2015/16 revenue was 11 billion euros.

Voestalpine is held up as a model in Austria of a traditional industrial company that has adapted to modern market requirements to survive. Once a regular steel producer, it now specialises in providing finished parts and equipment to the automotive, aerospace and rail industries.

The entry into the U.S. market is an important part of Voestalpine’s strategy to grow internationally and reduce its dependence on the Austrian market and expensive European energy to power its furnaces.

The Texas site will produce two million tonnes of premium hot briquetted iron, or sponge iron - a pre-material used in steel production - each year.

The rise in costs was due to weather-related delays, an unexpected construction boom in the region and additional investments including a change in warehousing design, according to the company.

A final calculation of the costs would only be possible after the ramp-up phase was completed in March 2017.

Most of the extra costs were more or less completely digested in the past business years and only a “comparatively minor balance” would be payable in the current business year.

“According to our current assumptions and maths we did, we will see, most likely, more or less from the very beginning the 12 percent internal rate of return on this project,” Chief Executive Wolfgang Eder said when asked about the Texas plant in a conference call with analysts in November.

Shares in the company are down 1.6 percent over the last five days but have outperformed sector peers over that period.

$1 = 0.9308 euros Reporting by Alexandra Schwarz-Goerlich and Kirsti Knolle; editing by Francois Murphy and Elaine Hardcastle