Vietnam's Hoa Phat is on track to achieve its target of producing 2.7 million mt of hot-rolled coil in 2021, Italy-based metallurgical plant maker Danieli said on Feb. 23.

          Danieli provided a new 3.5 million mt/year HRC mill to Hoa Phat's Dung Quat steel complex, which was started about nine months ago and produced up to 1 million mt of HRC as of Feb. 20, representing about 94% of nominal production capacity.

          In 2020, the steelmaker produced about 700,000 mt of HRC, which puts the 2021 target at more than 3.8 times higher.

          Hoa Phat is likely to meet its goal as it fired up the last of four blast furnaces on Jan. 6, taking the complex’s overall crude steel output capacity to 4.8 million mt/year.

          By the end of 2021, Hoa Phat plans an upstream meltshop expansion, which will bring HRC output to about 3.7 million mt/year.

          Thereafter, in early 2022, the Vietnamese steelmaker expects to begin its Dung Quat 2 iron and steel project that will add 5 million mt/year of production capacity, mostly focused on HRC.

          Currently, Vietnam's annual demand for HRC is about 14 million mt of which 60% is imported.

          "I think Hoa Phat's capacity will affect mostly imports from China and India, instead of South Korea, Japan and Taiwan," a Shanghai trader said. "If not considering 2020 as a special year, Vietnam will rely on about 4.3 million-4.5 million mt of HRC from China and India."

          "The HRC output material serves Hoa Phat's own demand and domestic market (mainly pipe makers)," another Vietnam-based trader said. "Somehow, it can reduce pressure on domestic demand, but I think it might not have a big impact, and Vietnam will still rely more on imports."

          Amid the HRC developments, JFE Shoji Steel Hai Phong started operating a second coil processing plant from February 2021 to meet demand for steel sheets and strips. The company, which is a unit of Japan's JFE Shoji Corp., did not disclose the capacity of the second plant.