Steel Export Breakthrough

In the first month of 2021, Hoa Phat Group achieved a significant breakthrough in steel exports. They exported 37,000 tons of finished construction steel, marking a 38% increase compared to January 2020. Additionally, the supply of steel billets for domestic and international markets reached nearly 140,000 tons, a 40% rise from the same period last year.

Continuing this growth trend, in February, Hoa Phat exported a shipment of over 12,000 tons, primarily consisting of cold-rolled galvanized products, to the Americas. Apart from construction steel, Hoa Phat is actively expanding its exports of steel pipes, galvanized steel, wire rod, galvanized wire, and prestressed steel.

The commissioning of Blast Furnace No. 4 at the Hoa Phat Dung Quat Iron and Steel Complex in January raised the Group's total crude steel production capacity to 8 million tons per year. This new capacity enabled Hoa Phat to achieve its highest monthly crude steel output to date, providing a foundation for increased production and the supply of Hot Rolled Coils (HRC) to the domestic market.

In conjunction with Hoa Phat, many domestic iron and steel manufacturers have experienced robust export growth in the early months of 2021. According to the General Department of Customs, the past two months saw an unprecedented surge in iron and steel exports, reaching 1.568 million tons valued at $1.123 billion USD, representing a 71.9% increase compared to the same period in 2020. When including $603 million USD from iron and steel products (a 26.4% increase), the total iron and steel export revenue exceeded $1.7 billion USD.

Iron and steel exports have sustained the growth momentum from 2020. While many major export sectors suffered significant losses due to the pandemic's impact on global demand, the iron and steel industry achieved a growth of over $1 billion USD, equivalent to 25.1%, in 2020.

Experts predict that the steel export potential in 2021 is promising, particularly due to the opportunities presented by special integration through the implementation of new-generation free trade agreements such as CPTPP and EVFTA, which are expected to boost steel production and exports to new markets.

Regarding CPTPP, the removal of a series of tariffs will allow Vietnamese steel enterprises to expand their export markets and simultaneously import raw materials from advantageous countries like Australia.

According to BSC Securities, CPTPP member countries are the primary suppliers of raw materials for steel production in Vietnam. For example, Australia is a major supplier of coal and ore to Vietnam, accounting for 25.7% and 22.9% of Vietnam's total imports, respectively.

Moreover, over 50% of imported scrap steel, used as a raw material for production, comes from CPTPP member countries. Certain members such as Canada and Malaysia also have substantial demand for importing various finished steel products.

However, the Vietnamese steel industry also faces challenges, as five countries are currently conducting anti-dumping investigations on Vietnamese galvanized steel and steel pipes, including two countries in the main Southeast Asian market, Malaysia and the Philippines.

Furthermore, corrosion-resistant steel is subject to tariffs ranging from 2.3% to 16.2% in Canada; cold-rolled carbon steel and non-cold-rolled carbon steel are subject to tariffs of 6.97% to 51.61%; steel pipes are subject to tariffs of 6.97% to 51.61% in Thailand; galvanized steel is subject to tariffs of 3.17% to 38.34% in South Korea. The European Commission (EC) has recently announced a review of extending safeguard measures on imported steel. Therefore, enterprises are advised to diversify into new markets and explore markets with significant value, such as China and Cambodia. Among these, China is anticipated to remain a billion-dollar export market for various product lines."

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