Vietnam-based Hoa Phat Steel reported record growth in steel production and sales in the Jan-Nov period despite the impact of the COVID-19 pandemic.
During the first eleven months of 2020, Hoa Phat Group produced 5.2mn mt of crude steel in Jan-Nov period, which is almost double of the prior year output. In terms of consumption, Hoa Phat’s finished steel sales grew up by 23.7pc to over 3mn mt from the prior year period, according to a company release on Dec 3. The company exported 1.6mn mt billets in the period.
Hoa Phat has prioritized the production of hot rolled steel (HRC) at Hoa Phat Dung Quat iron and steel production complex, learnt Davis Index from the company release. This reduced the production of finished long steel products used for construction activities. The demand for long products is recovering and sales are expected to rise in the coming months.
Finished steel exports in the Jan-Nov period rose to 480,000mt, up more than 100pc from the prior period. Major export destinations for construction steel were Japan, Korea, US, Canada, Australia, Cambodia, Laos, Malaysia, Taiwan, Indonesia and Ghana. In addition, Hoa Phat Group also exported nearly 1.6mn mt of square billets to China and other major buyers.
In November, the sales volume of finished steel hit 344,000mt, up 14.3pc from the prior year and up 37.6pc from October. Exports volumes reached 170,000mt, of which finished steel exports were 45,000mt, up more than 100pc from the prior November.
Flat steel Vs construction steel
Hoa Phat’s HRC orders are constantly rising and have exceeded its supply capacity. In November, Hoa Phat’s HRC output was at 170,000mt, up almost 50pc from October, raising the total amount of hot-rolled steel so far in 2020 to 515,000mt. The company aims to achieve higher profit margins in flat products than construction steel products.
The company takes advantage of large-scale production through blast furnace, iron ore route enabling it to keep HRC production cost lower and compete in the international market, particularly in Southeast Asia and China.
Hoa Phat’s aims to complete its Dung Quat expansion project by early January to operate at around 5mn mt annual capacity. It has accelerated the completion of furnace No. 4 at the steel complex to fulfill increased orders for both construction steel and hot-rolled steel products.