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Associated with the development of the business, recently, Mr. Tran Dinh Long, Chairman of the Board of Directors of Hoa Phat Group, decided to invest in three new projects in the Nam Phu Yen Economic Zone with a project scale of over 120,000 billion dong.Currently, Hoa Phat Group is the largest steel manufacturer in Southeast Asia, with more than 30 years of experience. After a period of learning, researching and discussing with the leaders of Phu Yen province, Hoa Phat Group decided to sign a memorandum of understanding to invest in three projects in the South Phu Yen Economic Zone. Projects include: the original beach port; investing in construction and trading in the infrastructure of Hoa Tam Industrial Park; and the Hoa Phat Iron and Steel Complex Project in Hoa Tam Industrial Park. The total expected investment capital is over 120,000 billion VND.Currently, Hoa Phat's production capacity is 8.5 million tons per year. Of which, high-quality steel billets and construction steel are 5.5 million tons and hot-rolled steel coils are 3 million tons per year. Hoa Phat Group is currently leading in Vietnam in terms of market share of construction steel, steel pipes and the top 5 largest coated steel sheet manufacturers. It is also the only Vietnamese enterprise that can produce HRC steel, prestressed steel cables and many other high-quality steel products.Along with that, Hoa Phat Group is also implementing the Hoa Phat Dung Quat 2 Iron and Steel Production Complex project in Quang Ngai, with a design capacity of 5.6 million tons of hot-rolled steel per year. It is expected that when the project is completed in 2025, Hoa Phat's annual crude steel production capacity will reach over 14 million tons, equivalent to the top 30 largest steel enterprises in the world.Regarding the business situation, in 2023, Hoa Phat Group will reach VND 120,355 billion in revenue, down 16% over the same period last year. Profit after tax is 6,800 billion VND, completing 85% of the year plan. Hoa Phat leaders said that in 2023, it will produce 6.7 million tons of crude steel, down 10% compared to 2022. Sales output of HRC steel products, construction steel, high-quality steel and steel billets reached 6.72 million tons, down 7%. In addition to traditional steel product lines, Hoa Phat Group has invested in deep processing, promoting the production of high-quality steel to serve domestic and export needs. The Hoa Phat steel export market has expanded to 39 countries and territories worldwide.Exporting helps Hoa Phat Group diversify consumer markets while contributing to foreign exchange earnings and balancing Vietnam's trade balance. Hoa Phat is still leading the market share in Vietnam in construction steel and steel pipes and is the only Vietnamese enterprise that can produce HRC steel, prestressed steel cables and many types of high-quality steel.With Hoa Phat Group investing in an additional factory in Phu Yen, it will increase the group's output, helping Hoa Phat firmly hold its position as the leading steel manufacturer in Southeast Asia. Besides, it also helps increase the position of Vietnam's steel industry in the world steel market.

Overcapacity in China has led to a surge in steel exports, affecting the consumption of domestic factories in Southeast Asia. According to short-term forecasts, the Southeast Asian steel market will be flooded with cheap Chinese steel, some of which is sold at prices lower than production prices through dumping behavior.According to the Secretary General of the Southeast Asia Iron and Steel Institute and former Deputy Minister of International Trade and Industry, expectations for the strong post-COVID-19 recovery in China's real estate and construction sector have not materialized. Meanwhile, steel output is expected to increase by 5% to more than 1 billion tons without any significant control policies. Even, Chinese steel exports are expected to reach a record high of 89 million tons. Excess capacity leads to "dumping" and the massive export of cheap steel to Southeast Asian countries.According to data from the Southeast Asia Iron and Steel Institute (SEAISI), total production capacity in the 2029-2030 period will reach 182.5 million tons, 2.3 times higher than the current capacity (78.1 million tons). Another obstacle is that China's construction and real estate sectors are unlikely to recover, so exporting steel to China is also difficult.In 2022, ASEAN-6's steel demand was 75.1 million tons, crude steel capacity was 78.1 million tons, output reached 50.5 million tons with capacity utilization at 64.6% (below the efficiency level of 80%). Steel imports reached 43.8 million tons, equivalent to 58% of demand. In Malaysia, factories face an even worse situation when they fall into a situation of overcapacity of more than 60%. Domestic demand was 5.4 million tons, capacity was about 10.6 million tons, while output is 3.6 million tons. Malaysia's top 4 long steel manufacturing companies also reported a loss of nearly 199 million USD in 6 quarters. From 2018 to 2022, the total losses of the 4 factories amounted to 1.35 billion RM. The new company entering Malaysia uses blast furnace (BF) technology that pollutes 3 times more than the EAF system. This negatively affects Malaysia's Net Zero roadmap by 2050.

In January 2024, Vietnam exported more than 1.16 million tons of steel with a value of more than 822.65 million USD and imported nearly 1.49 million tons of steel with a value of 1.06 billion USD. Notably, Vietnam's steel exports in 2024 will have many positive bright spots thanks to rising world steel demand and support from developed economies.1. Steel export situation in January 2024According to statistics from the General Department of Customs, as of January 2024, Vietnam's steel exports have increased for 4 consecutive months, reaching more than 1.16 million tons with a value of 822.65 million USD, an increase of 7.1% in price and 7.4% in value compared to the previous month; increased by 72.6% in volume and 80% y/y in 2023. The average export steel price also increased by 0.3% over the previous month and increased by 3.9% over the same period in 2023, to 709 USD/ton.2. Steel import situation in January 2024Conversely, steel imports in January 2024 reached nearly 1.49 million tons with a value of 1.06 billion USD, an increase of 27.3% in volume and 22.3% in value compared to December 2023; increased sharply by 151.2% in volume and 101.6% in value y/y in 2023. The average imported steel price reached 712 USD/ton, down 3.9% over the previous month and down 19.7% over the same period in 2023.Steel scrap imports in January 2024 also decreased after 3 consecutive months of increase, reaching 356,301 tons with a value of 140.96 million USD, down 18.8% in volume and 9.6% in value compared to the previous month. The average price of imported scrap steel reached 396 USD/ton, up 11.3% over the previous month and up 2.7% over the same period in 2023.3. Positive expectations for the steel industry in 2024The above positive results raise high hopes for the steel export market in 2024. Export volume in the following months can maintain growth thanks to a positive global demand outlook. According to the World Steel Association, world steel demand is expected to increase by 1.9% in 2024, demand from developed countries is expected to increase by 2.8%, of which the US and Europe will increase by 5.8% and 1.6%, respectively. On the other hand, steel demand of ASEAN countries (except Vietnam) is expected to increase by 5.2% in 2024, up 1.4% compared to 2023.It is expected that Vietnam's steel export output will improve in the first quarter due to the increasing difference between prices in North America and Europe compared to steel prices in Vietnam. In addition, Europe also issued sanctions and strictly controlled the import of semi-finished steel products from Russia while supporting the import of Vietnamese steel.

Recently, Pomina Steel plans to consider increasing the investment level of the Pomina 3 blast furnace project to VND 5,800 billion. At the same time, the company wants to establish a new legal entity with a strategic investor to comprehensively restructure the business.Pomina Steel Joint Stock Company has just announced the 2024 Extraordinary General Meeting of Shareholders documents with some notable content. Specifically, this steel manufacturer will submit to shareholders for review and approval of the settlement approval proposal and increase the blast furnace investment at Pomina 3 by more than 904 billion VND to nearly 5,880 billion VND. This additional adjustment is equivalent to an increase of 18% compared to the initial expected investment level. Pomina Steel Board of Directors requests shareholders to review, approve, and approve the above proposal so that the company can complete the project procedures.The Pomina 3 blast furnace has been deployed since 2019 and put into production in February 2012. Currently, according to the fourth quarter 2023 financial report, Pomina Steel recorded costs of up to 5,808 billion VND (accounting for more than 55% of total corporate assets) to implement the blast furnace and EAF furnace projects.In addition, Pomina Steel plans to submit to shareholders a comprehensive restructuring plan for Pomina through cooperation with strategic investors to establish a new legal entity, Pomina Phu My Joint Stock Company. In particular, Pomina Steel will contribute capital in kind to all land, factories, and equipment lines. Strategic investors contribute capital in cash. Strategic investors, charter capital, and ownership structure are expected to be presented specifically at the congress. Pomina Steel said that the strong restructuring, especially with the participation of strategic investors, is a milestone, marking an important turning point for the company. This strategic cooperation will provide the necessary capital for the company to restart the steel billet blast furnace. It is expected that Pomina Steel will operate the blast furnace again in the fourth quarter of 2024 after a period of shutdown to anticipate the return of real estate projects that are expected to recover strongly in the last months of the year.Previously, at the end of January 2024, Pomina Steel announced the temporary suspension of its plan to privately issue more than 70 million shares (equivalent to 20% of the company's charter capital) at a price of 10,000 VND per share to investors. Nansei Steel Strategy (Japan). These shares will be restricted from transfer for 3 years. Pomina Steel once expected to earn about 700 billion VND from the above capital sale deal to restructure and supplement capital for business activities.2023 was be an unfavorable business year for Pomina Steel, recording revenue of 3,281 billion VND, down 74.6% compared to 2022 and continuing to report a net loss of 960 billion VND compared to a reported loss of nearly 1,167 billion VND. in 2022. Thus, Pomina's total accumulated loss has reached nearly 1,271 billion VND, equivalent to 45.4% of equity. This is also the highest loss during the business's 25 years of operation.Pomina Steel's board of directors said the cause of the loss was mainly due to weak consumer demand, a sharp decline in steel prices, and the high fixed costs of the newly put into operation blast furnace project. Besides, the use of high financial leverage also "erodes" the profits of this steel company.Currently, Pomina Steel has three construction steel billet and rolling mills with a total capacity of 2.6 million tons. Of which, steel billet refining capacity is 1.5 million tons per year, and construction steel rolling capacity is 1.1 million tons. Pomina Steel currently focuses mainly on construction steel, with the key market being the southern provinces.

Currently, Hoa Phat owns 7 blast furnaces for steelmaking, including 4 furnaces in Dung Quat and 3 furnaces in Hai Duong. With a crude steel production capacity of 8.5 million tons per year, Hoa Phat is currently the leading steel production enterprise in Vietnam.According to information from Hoa Phat Group (HPG), in the fourth quarter of 2023, the group recorded consolidated revenue of VND 34,925 billion, an increase of 33% over the same period. Profit after tax recorded 2,969 billion VND, up 48% over the previous quarter and up 249% over the same period.Specifically, Hoa Phat supplied more than 2.1 million tons of crude steel to the market in the fourth quarter, an increase of 30% compared to the previous quarter. The consumption of construction steel products alone during this period reached 1.2 million tons and HRC reached 813,000 tons.Currently, the optimism of the steel market in the fourth quarter of 2023 has been reflected in Hoa Phat's inventory structure, where the proportion of finished products in inventory decreased to the lowest level since the second quarter of 2022. With consumption output gradually improving, both the value and proportion of raw materials in inventory have increased compared to previous quarters. However, this business said that raw material turnover has not returned to the level of around 3 months like in 2021 but continues to tighten at 2 months (62 days).Hoa Phat's leadership said that although the total steel consumption in 2023 is lower than the previous year, in terms of trend, the group's steel business picture has gradually brightened as output tends to grow over the past year, reaching its best level in the fourth quarter of 2023, recorded in both domestic and export markets. For the construction steel market, according to Hoa Phat, optimistic signals come from policies to remove difficulties and promote public investment, especially in the field of transport infrastructure. Regarding export markets, this business has continued to diversify its consumer markets by expanding to 39 countries and territories worldwide. Export output will continue to increase in 2024.Previously, in October 2023, Hoa Phat stopped operating a blast furnace at Hai Duong Iron and Steel Complex for maintenance and preparation for new production batches in 2024. Recently, Hoa Phat said that since all blast furnaces at all complexes in Dung Quat and Hai Duong have been re-operated, the raw materials needed to prepare for production have therefore also increased accordingly. Currently, Hoa Phat Hai Duong Iron and Steel Complex has 3 furnaces with a total capacity of 2.5 million tons and 4 furnaces at Hoa Phat Dung Quat with a capacity of 5.6 million tons per year.

According to the World Steel Association (WorldSteel), in 2023, global crude steel production reached 1,888 million tons, with Vietnam contributing 19 million tons to this figure. Despite a 5% decrease in crude steel production compared to 2022, Vietnam's notable achievement is an upward shift in its ranking, reaching 12th place globally among the 71 countries listed.Vietnam's crude steel production decreased by 5% but climbed one position in the rankingsIn 2023, Vietnam achieved a notable milestone as its crude steel production surpassed that of Taiwan, securing the 12th position in the global rankings. This highlights a positive outlook for steel demand in Vietnam, despite the ongoing incomplete recovery of the domestic real estate market. Additionally, leveraging political advantages, countries in the Middle East view Vietnam as a promising destination for steel imports. Experts emphasize that Vietnam's steel export volume in 2023 also benefited partly from the weakened export activities of competing nations such as China, India, and Turkey, creating opportunities to boost production capacity in the country.Vietnam ranks among the top 12 countries with the highest global crude steel production in 2023Predictions for 2024 anticipate a positive recovery in both demand and steel prices in Vietnam, with raw material prices forecasted to significantly decrease. This is expected to lead to a substantial increase in the Vietanm steel industry's profit margins. The primary driving force for domestic steel consumption comes from the expected strong recovery in the civil construction sector, while the industrial and infrastructure construction segments are projected to sustain growth throughout 2023.Regarding the export sector, the World Steel Association notes that the growth in infrastructure construction activities in the ASEAN, U.S., and EU markets, coupled with the benefits from bilateral agreements, will boost Vietnam's steel export activities this year. Therefore, it is expected that Vietnam's crude steel production in 2024 will experience a more robust increase compared to the current year, driven by both domestic and international market dynamics.China and India are the two largest steel producers globallyChina has once again maintained its position as the leading country in the global steel industry. In the past year, 2023, the country produced a staggering 1,019 million tons, sustaining its production at a stable level after two consecutive years of decline. According to analysts from S&P Global Commodity Insights, China's steel production is anticipated to decrease by 0.5% in 2024 as domestic plants seek solutions to address excess supply issues along with weak profit margins. This outcome is expected to lead to another prediction that China's iron ore imports will decline due to the slowing down of steel production.The statistical chart of raw steel-producing nations for the current year also reveals a remarkable surge in India's production, driven by robust domestic demand and infrastructure projects supported by the government's ongoing initiatives. In 2023, India recorded a noteworthy growth, with a production increase of 11.8% compared to the previous year, reaching an impressive 140.2 million tons. Notably, amidst the global decline in steel demand, India continues to maintain its position as one of the countries with the highest growth rates in crude steel production and stands out as one of the few nations showing positive growth trends.The monthly crude steel production figures for China and the world in 2023Crude steel production in Europe decline from weak demandOverall, crude steel production in Europe is reported to have decreased by 6.7% in 2023 compared to 2022. Among the 71 countries listed, the majority of nations in the European region witnessed negative growth. Specifically, Germany, recording its lowest crude steel production since 2009 with around 35.4 million tons in 2023, marked a 3.9% decrease from the previous year. Similarly, the second-largest steel producer in Europe, Italy, also exhibited a 2.5% reduction in production to 21.06 million tons.The simultaneous decline in steel production can be attributed to low consumption demand and high energy prices, presenting challenges for factories in the region. The steel industry in Europe is grappling with high production costs due to increased energy prices since the conflict between Russia and Ukraine, alongside an influx of cheaper imported products that impose limitations on local steel manufacturers.The production downturn is not limited to domestic output; steel exports to the EU also witnessed a 5.57% reduction in 2023 compared to the same period. However, the growth rate of steel exports to new markets, including Western Asia and Central Asia, experienced a substantial increase. The persistence of inflationary cycles and the strong impact of trade protectionism are considered the primary impediments to steel exports from other countries to this region.