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Strong May sales for Hoa Phat signal a recovery in Vietnam's steel industry

Strong May sales for Hoa Phat signal a recovery in Vietnam's steel industry

Steel NewsDate: 09-06-2023 by: Ngan Le

After a long period of being in the dark, recently in May, the Vietnamese steel market regained a signal of recovery when Hoa Phat's steel sales increased 16% over the previous month.

Hoa Phat's steel sales regain growth after a long period of dismal

In May, Hoa Phat Group recorded consumption of construction steel at 284,000 tons and increased 27% compared to the previous April. Hot rolled steel coil (HRC) also achieved a positive sign when reaching 243,000 tons and increased by 8% over the same period last year. This is the milestone marking the highest HRC growth of Hoa Phat since the beginning of this year, in which HRC consumption from the export market accounts for 55% of total consumption. 

According to the growth wave, steel pipes and galvanized steel also recorded positive signals when steel pipe reached 57,000 tons sold and it rose 12% compared to May in 2022. Galvanized steel products reached 34,000 tons sold to export and domestic markets, recording a double growth compared to May last year.

Overview of the first 5 months of 2023, Hoa Phat has produced a total of 2.34 million tons of crude steel, Hoa Phat's steel sales reached 2.36 million tons, of which construction steel reached 1.36 million tons; Hot rolled coil recorded 965,000 tons, galvanized steel sold 136,000 tons and finally pipe steel sold 266,000 tons.

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Line Chart About The Total Sales Of Steel Hoa Phat In 5 Months 2023

In addition to domestic consumption, the export market has contributed significantly to the sales volume growth for the Vietnam steel industry. In the first 4 months of 2023, Vietnamese steel has been exported to more than 30 markets, in which Italy is currently the largest steel export market in Vietnam with export volume this year increasing by 70% compared to last year.

Vietnam steel industry is expected to prosper at the end of the year

The Hoa Phat's steel sales growth is a signal that the steel industry is gradually prospering because Hoa Phat is considered as the leading force in the Vietnam steel industry. The increase in sales volume will stimulate the recovery of steel production across the country as many steel producers have cut manufacturing costs to cope with oversupply.

The weakness of the real estate market has directly affected steel demand clearly. However, in the context that the world is prioritizing sustainable energy development, steel's role is increasingly appreciated. Wind turbine production projects are being initiated by many countries, including Vietnam, which is also a country that is prioritizing the development of renewable energy. The installation of wind turbines for the project will be a new consumption trend for the steel industry when 80% of a turbine volume is made of steel.

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Hoa Phat is currently the largest steel producer in Vietnam with a crude steel production capacity of 8.5 million tons per year. In addition, the group is also the first enterprise in Vietnam to produce hot rolled steel with a capacity of 3 million tons per year and has up to 12 different types of HRC steel grades, enough to supply many different markets.