Hoa Phat Steel, a leading Vietnamese steel producer, is speeding up construction of its US$3.4 billion Dung Quat 2 steel complex in Quang Ngai with the aim of starting operations early next year, according to The Investor. The complex is designed to produce 5.6 million tons of steel annually, including 4.6 million tons of hot-rolled coil and 1 million tons of specialty steel.
For some broader context Vietnam’s hot-rolled coil production capacity currently covers only 70 percent of consumption needs. As a result, Vietnam still imports steel from China, India and South Korea.
It is worth noting that China’s steel industry has significantly impacted Vietnam’s steel market. The Chinese real estate crisis has led to a construction slowdown, leaving steel mills there with excess inventory. As a consequence, China has ramped up steel exports, particularly to Vietnam. In the first half of 2024, Vietnam imported more than 8.2 million tons of iron and steel, an increase of 48 percent year on year, with 69.5 percent originating from China, according to the General Department of Customs.
This influx of China imported steel is considered a serious threat to domestic producers. Two steel firms in Vietnam, Hoa Phat Steel and Formosa initiated a request for an anti-dumping investigation into Chinese hot-rolled steel imports back in March. Subsequently, Vietnam’s Ministry of Industry and Trade decided to officially launch an anti-dumping investigation into galvanised steel from China and Korea in June.
Hoa Phat Steel, trading under ticker HPG, closed at VND 26,300 a share on Monday. Notably, as of August 6, foreign traders held 24.4 percent of the company’s shares with the company sporting a foreign ownership cap of 49 percent.
See also: How to Open a Factory in Vietnam: Ultimate Guide 2024