Vietnam's steel giant Hoa Phat targets higher sales of construction steel in 2020, with plans to hit volumes of 3.5 million-3.6 million mt in 2020, about 26% more than the 2.8 million mt it supplied in 2019, data from the steelmaker showed.
Within the 2020 plan, the company also aims to achieve a volume of 1 million mt of steel supplied to the southern regions of the country, and to focus its brand coverage and market share within the central and southern regions.
To meet this target, Hoa Phat Dung Quat Steel complex at Quang Ngai province, which has seen over 80% of its main equipment items constructed, is expecting to roll out its operations of two additional blast furnaces, each with annual production capacity of 1.2 million mt of hot metal, and its hot-rolled coil rolling mill from second-quarter 2020.
Previously, with the company’s only production mills located in the north, delivery of its products from its Hai Duong plant to the south would take more than seven days, however, with its new plant at Quang Ngai province, delivery has been shortened to three days.
After taking nearly three years, phase one of Dung Quat Steel complex has already seen the firing up of the company’s two new 1,080 cubic meter blast furnaces, with annual production capacity of 1.2 million mt of hot metal, in Q3 2019 and Q4 2019, respectively. This effectively doubled the steelmaker's total long steel annual production capacity to 4.35 million mt.
Once all four blast furnaces are online, Dung Quat Steel will have 2.4 million mt/year of wire rod and rebar production capacity, and 2.4 million mt/year of HRC capacity.
Steelmakers within Vietnam, however, raised concerns about growing overcapacity within the country, as the blast furnace route of steelmaking outpaces that of the electric route since 2018.
Along with the steel complex, the steelmaker is working to finish the Hoa Phat Dung Quat port, which will be able to handle cargo ships of 200,000 dwt.
Vietnam's steel demand is expected to be supported by its construction sector, which is projected to grow by 8%-9% annually over 2019 to 2023, the South East Asia Iron & Steel Institute, or SEAISI, said.
The country's steel demand is expected to reach 25.4 million mt in 2020 due to the government’s active drive for construction projects, the South Korea-based Posco Research Institute had forecast, from about 21.6 million mt in 2017.
-- Clement Choo, Samuel Chin
