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Industry Analysis

Vietnam's steel sector is projected to grow by 10% in 2025, driven by rising domestic demand, reduced competition from Chinese steel due to anti-dumping duties, and stable input costs. The Hoa Phat Group is expected to benefit from these trends, with strong domestic market consumption and opportunities in public investment projects. Additionally, the company's gross profit margin is anticipated to improve due to stable raw material prices.

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Ngân Võ Trần Tuyết
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43 views2 pages

Industry Analysis

Vietnam's steel sector is projected to grow by 10% in 2025, driven by rising domestic demand, reduced competition from Chinese steel due to anti-dumping duties, and stable input costs. The Hoa Phat Group is expected to benefit from these trends, with strong domestic market consumption and opportunities in public investment projects. Additionally, the company's gross profit margin is anticipated to improve due to stable raw material prices.

Uploaded by

Ngân Võ Trần Tuyết
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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INDUSTRY ANALYSIS: VIETNAM STEEL SECTOR 2025

Growth Drivers for the Steel Industry

1.​ Rising Domestic Demand: Domestic steel demand in Vietnam is


projected to grow by 10% in 2025, reaching 23.8 million tons, driven
by a recovering real estate market (new apartment launches doubled
in 2024, with a 21% annual supply increase expected in 2025-2026)
and accelerated public investment in infrastructure projects like the
North-South Expressway, Can Gio Port, and North-South high-speed
railway. Construction steel and HRC will account for 40.9% and 24%
of total consumption, respectively (FPTS).
2.​ Reduced Competition from Chinese Steel: Vietnam’s anti-dumping
duties on Chinese HRC (19.38%-27.83%, effective March 7, 2025)
ease competitive pressure, as China’s steel demand is expected to
drop by 1% in 2025 due to its real estate crisis (sales down 14.3%,
new projects down 23% in 2024).
3.​ Cost Advantage from Stable Inputs: Iron ore and coking coal
prices fell by 28% and 37.6% in 2024 and will remain stable in 2025,
enabling lower production costs and improved gross margins for
domestic steel firms.
4.​ Push for Clean Steel Production: The EU’s CBAM (full
enforcement in 2026) requires cleaner production methods.
Vietnamese steel producers are investing in green steel solutions to
meet these standards and stay competitive in export markets.
5.​ Limited Impact from U.S. Tariffs: The U.S.’s 25% steel tariff
(effective March 4, 2025) has minimal impact on Vietnam, already
subject to a similar tariff since 2018. Vietnam’s steel exports to the
U.S. reached USD 983 million in 2024, up 159% from 2023.

Outlook for Hoa Phat Group (HPG)


Hoa Phat is set to benefit significantly from these trends, leveraging its
leadership in construction steel and HRC production, and its focus on the
domestic market. 1. Domestic Market Strength: Hoa Phat’s construction
steel consumption hit 10.9 million tons in the first 11 months of 2024, up
12% year-on-year, a trend expected to continue in 2025.2. Public
Investment Opportunities: Hoa Phat supplied 10,000 tons of steel pipes
for the National Conference Center in Hanoi in 2024 and is poised to
supply millions of tons for projects like the North-South Expressway in
2025. 3.Improved Margins: Stable raw material prices will boost Hoa
Phat’s gross profit margin to 15-17% in 2025, from 14% in 2024.

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