Steel News

KIS Vietnam Securities Joint Stock Company believes that the steel industry will face many difficulties in 2023 if sales volume does not grow significantly.In the newly updated report, KIS Securities said that the revenue growth rate in the second quarter of 2023 of steel enterprises on the stock exchange decreased by 27.7% over the same period last year.The top nine steel companies in Vietnam all had negative growth. Hoa Phat recorded negative revenue growth of 21.1% over the same period last year. This is also the leading enterprise in the steel industry due to its dominant position. Similarly, Nam Kim also had negative revenue of 23.5%, while Hoa Sen had the most profound drop in revenue with negative growth of 29%.Although domestic demand is low, the number of products exported to other countries is relatively high. Strong growth of the steel industry through the export channel was seen in the total export volume of 2.1 million tons, up 25% year-on-year. Particularly for HRC products, 1.1 million tons have been exported, an increase of 128% over the same period last year and nearly 55% compared to the first quarter of 2023.In terms of profit, the growth momentum of total profit in the second quarter of 2023 for nearly half of the 24 Vietnamese steel enterprises recorded a decline. Total net profit reached 498 billion dong, down 89% over the same period last year but up slightly by 7% compared to the previous quarter.However, nearly half of the listed steel companies suffered losses in the second quarter. Among the top 9 enterprises in the steel industry, Nam Kim has the highest revenue, with a profit of 125 billion dong after losses in the previous 3 quarters, while Hoa Sen only has a profit of 14 billion dong. Hoa Phat's net profit dropped 64% over the same period last year (1,447 billion dong) but recovered significantly compared to the first quarter.KIS also forecasts that difficulties and challenges for the steel industry will still be present in the third quarter when the domestic market's demand is still fragile due to the rainy season's impact, and the product's selling price will affect the margin. Enterprise profits. The export channel is still a bright spot for steel enterprises. It is forecasted that the total consumption volume in the third quarter may decrease by 9% compared to the previous quarter to 5.8 million tons.For input materials, KIS believes that input prices of steel industry materials will increase due to positive signs from the Chinese market. However, the output prices of steel products will not increase at the same rate as the market input prices. Therefore, the profit margin of steel producers will be slightly affected by falling selling prices but will remain flat in the third quarter thanks to low and stable input material costs. KIS forecasts that the HRC price recovery in the third quarter will positively affect the revenue and profit of companies from the end of September and throughout the fourth quarter of this year.KIS said that the steel industry is still facing many difficulties in the context of decreasing market demand. In addition, slowing global economic growth and domestic issues related to the bond and real estate sectors may further threaten the industry's business results, and weak demand will remain a significant concern this year.

In the first 6 months of 2023, Hoa Phat's electricity output at 2 complexes Dung Quat and Hai Duong reached 968 million kWh. Due to the residual heat recovery system, Hoa Phat can save more than 67 million USD and be self-sufficient in over 70% of electricity for steel production.Hoa Phat's electricity autonomous generation saves 67 million USD in steel productionBy the end of June 30, 2023, the total electricity generation of Hoa Phat Iron and Steel Complex thermal power plants in Dung Quat and Hai Duong reached 968 million kWh. Specifically, the self-sufficient electricity generation for Hoa Phat Hai Duong Steel Complex in the past 6 months has reached 204 million kWh, and the electricity output for Dung Quat has reached 764 million kWh.Compared to the same period, Hoa Phat's electricity generation output decreased by 30% (6 months of 2022 reached more than 1.4 billion kWh) because the group actively cut down steel production when domestic consumption was still weak. Specifically, Hoa Phat intends to produce steel at 2 mills, including Hai Duong and Quang Ngai depending on market demand to ensure a reasonable inventory.Hoa Phat Dung Quat Factory currently owns 6 residual thermal power generators, in phase 2 of Hoa Phat Dung Quat, the group will continue to invest in 5 power generators with a capacity of each unit reaching 60MW. It is known that when phase 2 is completed, the total power generation capacity at the Hoa Phat Dung Quat complex will reach 660MW, and the annual electricity output is estimated at more than 5 billion kWh.If converted at the current electricity price,  the autonomous electricity generation at the Dung Quat and Hai Duong complex is worth over 67 million USD (equivalent to 1600 billion VND). It can be seen that the application of measures to recover residual heat for power generation has helped the group save tens of millions of USD per year while being self-sufficient in energy for production.Hoa Phat applies greening technology in steel productionIn the production process previously, the group used a large amount of electricity, water, coal, etc., so the mills emitted a considerable amount of dust and waste. In recent years, Hoa Phat has changed its steel production processes towards sustainability as well as environmental protection.One of the famous greening solutions is the recovery of residual heat to create power for the production process. Accordingly, this technology will eliminate all harmful gas, fumes, and chemicals generated from the coking process and only recover residual heat to make raw materials for generators. The application of heat recovery technology will help Hoa Phat's electricity be saved and also ensure the health of workers at the factory because the technology will significantly control the amount of polluted dust.In addition, Hoa Phat also improved the system process of blast furnace slag into construction materials, blast furnace slag emitted during the production process will be finely crushed to the required rate. Treated granulated slag will have a fineness similar to cement, and they are fully qualified for applying building material. Hoa Phat Group is one of the few businesses that can turn solid waste into construction materials and successfully recycle residual heat into electricity for production. Thanks to these recycling technologies, Hoa Phat can save significant costs in electricity consumption and solid waste treatment systems so that the product price is always at the optimal level and is suitable for almost the financial budgets of businesses. 

Recently, the Trade Remedies Department has just received information that Morocco has issued a conclusion to review safeguard duties on imported hot-rolled steel for products with HS codes 72.08, 72.11.13, 72.11.14, 72.11.19, 72.25.30, 72.25.40, 72.26.20.00.11, 72.26.20.20, 72.26.20.05, 72.26.20.052.72.26.20.00 .59, 72.26.91 and 72.26.99.980.00. Vietnam's hot-rolled steel continues to be exempt from Morocco's safeguard duty because of a developing country with negligible imports.1. Morocco imposed a safeguard duty of up to 25% on imported hot-rolled steelAccording to data from the General Department of Trade - Ministry of Industry and Trade of Morocco, the country's imported hot-rolled steel output reached 107,213 in 2018, an increase of 32,725 tons compared to 2014. In addition, only in the first 7 months of 2018, Morocco imported 79,371 tons of HRC, equal to 74% of the total output of the previous year. The massive import of hot-rolled steel pushed domestic manufacturers to bankruptcy when production and consumption of hot-rolled steel plates decreased by 19.4% and 28% in 2017 and 2018, respectively.Faced with concerns about dumping by foreign importers causing difficulties for the domestic steel market, Moroccan authorities have initiated a safeguard investigation into hot rolled steel imported into the country on May 29, 2019. The products under investigation fall under the following HS code groups: 7208, 7211.13, 7211.14, 7211.19, 7225.30, 7225.40, 7226.20.00.11, 7226.20.00.21, 7226.20.00.30, 7226.20. 00.40, 7226.20.00.51, 7226.20.00.52, 7226.20.00.59, 7226.91, 7226.99.90.91 and 7226.99.90.99.On October 22, 2019, the Moroccan government announced the imposition of a temporary safeguard duty of 25% on imported hot-rolled steel plates, effective for 200 days. After the sunset review, on June 19, 2020, the Moroccan government imposed a definitive anti-dumping duty on products with the above HS code group for a period of 3 years at a duty rate of 25%.Some developing countries, including Vietnam, are exempt from duty because of their negligible import volume. On May 3, 2022, Morocco sent a notice to the WTO approving a request to reduce the safeguard duty rate on imported HRC products by 1% each subsequent year.2. Vietnam hot rolled steel is not subject to Morocco's safeguard dutyOn May 25, 2023, Morocco conducted a sunset review of safeguard measures for imported hot rolled steel products and decided to maintain the duty rate of 23% from June 19, 2023, to June 18, 2026, but reduce 1% each subsequent year. However, Vietnam continues to be excluded from the safeguard measure because of a developing country with negligible import volume.According to World Trade Organization (WTO) statistics, by the end of 2021, Morocco has conducted 17 anti-dumping investigations and 12 global safeguard cases against imports into the country. 3. Advantages of importing hot rolled steel from VietnamVietnam has a self-sufficient source of hot rolled steel to serve domestic and export demand with a total production capacity of 12.8 million tons/year. All products are manufactured according to modern continuous casting and rolling production lines, which can reach a minimum thickness of 1.2 - 2mm to meet many international standards such as JIS, MS, SAE, BS, EN,...Some fastidious markets such as Europe, the United States, Australia, the UK,... are significant for the certificate of origin, so the autonomy of hot-rolled steel produced in Vietnam has opened up many export opportunities across countries.In addition to product quality, importing hot rolled steel from Vietnam also has the advantage of cost optimization due to cheap labor and abundant raw materials. Data from the General Department of Vietnam Customs said that steel export output in April 2023 reached 973,549 tons of iron and steel, reaching 812 million USD, up 11.4% and 18% respectively over the previous month. In the first 4 months of 2023, Vietnam exported 3.25 million tons of iron and steel with a value of 2.52 billion USD, up 0.6% in volume.Importing hot-rolled steel from Vietnam into Morocco is exempt from safeguard duty, helping Moroccan importers access an ample HRC supply at a better price than other exporting countries. For all inquiries about the Vietnam steel market, please contact MRS Steel via Email at vanloc@mrssteel.com.vn for 24/7 support.

According to the new report in Quarter 2/2023, the group declared they had achieved more than $ 1.2 billion in revenue. The Hoa Phat's profit also had a spectacular growth with more than $ 77 million, which was 3.8 times compared to the previous quarter 1.Hoa Phat's profit improved enormously although of the unsustainable domestic steel marketHoa Phat Group has just announced business results in the second quarter of 2023 with revenue of 29,800 billion  VND (more than $ 1.2 billion), down 21% compared to the same period last year but slightly increased by 9% compared to the first quarter of 2023 (Q1 revenue reached VND 26,865 billion). The total revenue in the first 6 months of Hoa Phat recorded 56,655 billion VND (more than 2.3 billion USD); compared to the plan's target at the beginning of the year, Hoa Phat achieved 38% of the plan.Similar to revenue, Hoa Phat's profit showed a substantial improvement despite the weak steel consumption in the country, with more than 1,830 billion VND in profit after tax (77 million USD). Although the profit in the second quarter had a deep decline compared to last year's period, it improved a lot with 73% growth in the first quarter of this year.In addition, the sales volume for the total of 6 months this year, including construction steel, billet, and hot rolled coil (HRC), reached 2.9 million tons and decreased by 27% compared to the 6 months in 2022. Hoa Phat has realized that steel consumption is still weak, and the group has actively reduced steel production activities. Specifically, in the first 6 months, Hoa Phat produced 2.86 million tons of crude steel, down 34% compared to the same period.Hoa Phat promotes implementing the steel mill projectsThe positive revenue signals in the first half of this year motivate Hoa Phat to continue implementing steel production strategies. Hoa Phat focuses on implementing the Hoa Phat Dung Quat 2 iron and steel production complex project with an HRC capacity of 5.6 million tons/year. When the project is completed, it will increase Hoa Phat's total crude steel capacity to 14 million tons/year. Currently, Dung Quat 2 project has completed 30% of the schedule.Steel products have always been the main product line that brings the majority of Hoa Phat's profit, so in the near future, Hoa Phat will continue to invest in production lines as well as speed up implementing factory processes. Besides the Hoa Phat Dung Quat 2 project, the group has continued to research and make up the Dung Quat 3 project to help increase the total crude steel capacity to 21 million tons/year.In addition, the group is orienting to produce high-quality steel - a steel that possesses outstanding hardness, it's used as a cutting material in the production process. The tool steel market is predicted to be a potential market in the coming years; adding the tool steel segmentation to one of the main target markets will make Hoa Phat solve the consumption problem instead of depending on real estate. 

In the second quarter of 2023, VNSteel lost VND 255 billion, along with the net revenue decreased by 29% compared to the same period last year. Besides, the company also recorded a loss of 324 billion dongs from associated companies in the steel industry.The VNSteel's report has made many investors disillusionedAccording to the report data, VNSteel's net revenue reached 6,754 billion VND, and it decreased 29% over the same period. After deducting the cost price, gross profit was only 94 billion VND and decreased sharply by 57% compared to the previous second quarter. Total net revenue of the first 6 months in 2023 reached 15,097 billion VND, down 31 % compared to the first 6 months in 2022. Similarly, the gross profit index showed negative signals when it reached VND 480 billion in 6 months and decreased by 25% over the same period.Although the revenue in the second quarter was a step down compared to last year, there were still some bright spots in the company's business. Financial revenue in this period increased by 15% compared to last year. Besides, financial and selling expenses were also reduced by 11% and 55%, respectively, compared to the previous quarter.Efforts to cut costs and boost financial activities have not been enough to improve business results. VNSteel's profit after tax in the second quarter of 2023 lost 284 billion and fell sharply by 57% compared to the second quarter of 2022. This result surprised many investors when just 3 weeks ago VNSteel had reported a pre-tax profit of the holding company of more than 133 billion dongs.Steel price fluctuations are the direct cause of VNSteel's difficultiesVNSteel evaluates that the domestic steel market has many challenges. Although the worst time has passed, the domestic demand is gloomy, and the export situation has not made many strong impressions, which has affected the Vietnamese steel enterprises.Since the beginning of the year, the domestic market has experienced 19 corrections in construction steel prices. Specifically, in the first quarter, there were price increases, but from the beginning of the second quarter onwards, the price of construction steel has adjusted 13 consecutive declines. The average price of all steel products in the past 6 months fell sharply from 13.9 to 37% over the same period.Steel consumption is also not very optimistic when finished steel decreased by 30% over the same period, long-rolled steel decreased by 33%, and cold-rolled coil decreased by 24%. In the first 6 months of the year, total sales volume only achieved 38% of the previous strategy. The weak domestic demand and the international steel demand have uncertainties leading to the narrowing of export scope.Outlook for steel industry recovery from the government's supportive policiesAlthough the steel market is still facing many difficulties; However, the period from now to the end of the year is predicted to have many outstanding highlights from the government's supportive policies in the real estate and construction sectors.The National Assembly has approved an economic recovery support package worth 355,000 billion VND, of which nearly 50% of the package value will be spent on infrastructure development such as Long Thanh airport, North–South Expressway East, and logistics ports,... The promoting constructive stages is expected to increase the steel consumption demand.In addition, the government approved the project ‘Investing in building at least 1 million social housing apartments’ earlier this year. The implementation of housing construction projects is considered a breakthrough to help revive domestic steel enterprises to solve the problems in consumption demand.It can be seen that the current situation of the steel market is still under pressure, but with a series of economic stimulus policies of the government, the domestic steel industry is expected to prosper gradually in the near future. 

Recently, Nam Kim Group announced its latest financial report for the second quarter of 2023. Accordingly, the profit after tax in the first 6 months of the year reached 76,2 billion dong. This is also the first quarter of profit after losing business in the previous quarters.In the second quarter of 2023, Nam Kim Group recorded net revenue of 5,499 billion dong, down 23.6% year-on-year. The cost of goods sold also decreased by 20.6% to 5,004 billion dong, so gross profit decreased by 44.5% to 496 billion dong.Financial revenue for Nam Kim Group decreased by 53.7% to 50,5 billion dong. The company's expenses in the last quarter also decreased, in which selling expenses decreased by 60% to 214 billion dong.Nam Kim's leadership also said that 2023 would be a year of many challenges and not really favorable for growth when domestic market demand is still weak. Countries also strengthen trade protectionist policies to protect the production sources of domestic enterprises, negatively affecting Nam Kim Group's export activities. However, the most difficult period has passed when the business activities of enterprises have had a positive trend.In the second quarter of 2023, Nam Kim's profit after tax reached 125,4 billion dong, down 38% over the same period last year. This is also the first quarter to be profitable again after reporting losses in previous quarters. In terms of business orientation in 2023, Nam Kim Group sets a business target of 20,000 billion dongs in revenue and an expected profit before tax of 400 billion dongs. Thus, at the end of the year's first half, with what has been achieved, Nam Kim Group has completed 49% of the revenue target of 9,874 billion dong and 29% of the year's profit target of 76,2 billion dong. If this result remains unchanged, Nam Kim shares may be traded on margin again in the near future.Nam Kim Group will also optimize the capacity of production lines to increase capacity to 1,2 million tons per year, thereby increasing productivity, reducing production costs per product unit, and increasing capacity enterprise competition.By the end of the second quarter, Nam Kim's total assets reached 12,179 billion dongs, down 9.5% over the same period last year. The company has 950 billion dongs in cash and 134.5 billion in cash equivalents. At the end of the period, financial investment reached 396 billion dongs, investment in trading securities alone reached 120 billion dongs, almost all of which were bonds, and more than 9 billion dongs were invested in 1,174 BID shares.In addition, Nam Kim Group also had 1,885.6 billion dongs of short-term receivables, up 24%. Inventories have decreased by 25.3 billion dongs to 5,385 billion dongs, and Nam Kim has set aside 156.4 billion dongs to reduce inventory prices.On the stock market, after the trading session on July 28 closed, Nam Kim Group shares increased by 0.76% to 19,800 VND/stock, and trading volume reached more than 8,5 million units.