Vietnamese steelmaker Hoa Phat Group has doubled its Australian imports from the prior-year period, which reached $700mn in January-November. Thus, Australia has become the largest supplier of raw material to Hoa Phat, the company said.
Rise in coal and iron ore imports
Along with imports major raw material for steel production like ferrous scrap, iron ore and coal, Vietnam has witnessed a jump in imports of Australian zinc products due to a faster delivery period and low freight rates. Australian kept its prices competitive amid enough supply and limited domestic consumption.
As per the statement, more than half of the total import value, $364mn, was attributed to coking coal imports which rose three-folds, compared to $115mn in 2019. Amid trade tensions with the Chinese government, Australian miners preferred to supply coal and iron ore to Vietnam.
Hoa Phat group’s total purchases of iron ore registered a whopping 19-fold jump to $123mn in the first eleven months of the year from the prior year.
To fulfill the additional requirement at its newly commissioned iron and steel integrated complexes in the northern province of Hai Duong and the central province of Quang Ngai’s Dung Quat Economic Zone, Hoa Phat bought more coal and iron ore this year.
Outlook
With soaring import numbers, Hoa Phat is estimated to account for 17pc of Australia’s total export value to Vietnam in 2020, compared to 7.4pc in 2018 and 7.6pc in 2019. It is expected to outlay over $1bn on goods from Australia next year, an annual increase of 40pc.
According to the latest statistics of Global Trade Atlas for Jan-Oct 2020, two-way trade turnover between Vietnam and Australia reached nearly $7bn. In this, the export value from Australia to Vietnam in January-October 2020 reached nearly $3.5bn.
In 2021, Hoa Phat’s imports from Australia are projected to rise above $1bn, witnessing an increase of 40pc against the projected value in 2020.