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Since the beginning of the year, Vietnam's steel prices have continued to grow.
Especially since March, affected by the conflict between Russia and Ukraine, the scale of steel supply has been further reduced, resulting in another increase in supply prices. At present, the price of steel billets in the Southeast Asian market has exceeded 700 US dollars / ton, up 70-80 US dollars / ton from the beginning of February. The selling price of many steel companies in Vietnam has risen to 78 US dollars / ton or even higher, which is close to the all-time high in the Vietnamese steel market.
Products of Vietnam Hefa Group Image source: Tisco
According to the steel industry forecast report for the first quarter of 2022 released by the Vietnam Commercial Bank (VCBS), the reason for the rise in steel is that Russia (accounting for 10% of the global steel supply) and Ukraine (4% of the global steel supply), which are the world's important energy commodities, will have their steel sales prices and costs rise rapidly; while a series of related products, including oil, gas and coal, the price will almost return to the highest price in 2021. This has further contributed to the rise in global steel production costs.
Many manufacturing industries have been affected by the rise in raw materials, and the only one who can eat this wave of rising dividends is Tran Dinh Long, CEO of Vietnam Hoa Fat Group, known as the "king of Vietnamese steel".
As a billionaire who surpassed Nguyen Thi Phuong Thao, the owner of Vietjet Airlines, at the end of 2020 to become the second richest man in vietnam's stock market, currently sitting on a net worth of US$3.2 billion, Mr. Tan Dinh Lung entered the top 1000 of the world's richest list for the first time.
Tran Dinh Long, CEO of Hoa Fat Group, Vietnam Image source: Tisco
He heads the Hoà Phát Group, which is a 50% market share of steel building materials, one of Vietnam's real estate giants and a major supplier of Australian beef. Hefa Group's construction steel market share in Vietnam has increased by nearly 6% in the past year alone to 36.3%, while steel exports account for 50% of all of Vietnam. In January 2022, in just one month, Hefa Group's construction steel sales doubled year-on-year, exceeding 380,000 tons, and steel exports also tripled.
With the recent global supply chain congestion and container shortage, Hoà Phát has taken advantage of its steel production to start building a container factory during this extraordinary period, and the container factory in Batu Vung Tau is scheduled to be officially put into operation in the fourth quarter of this year. In the future, container production is also included in the business map of Hefa Group. From November last year to the present, after more than 3 months of construction, the plant has been successfully capped, with a construction area of nearly 6 hectares, and the annual container production capacity of the first phase is planned to reach 200,000 TEU/year.
Hefa container factory in Batti Vung Tau Province Source: vietnambiz.vn
According to VNDirect analysis, due to the political turmoil in Russia and Ukraine, the production of many steel-producing countries in the context of production reduction, in general, Vietnam can seize the opportunity of steel export growth and become a new world-class steel factory; at the same time, in the local market of Vietnam, with the construction of north-south highways and major urban ring roads, the demand for infrastructure investment has increased sharply, driving the growth of steel demand. These internal and external conditions have made Vietnamese steel companies profitable, and also made the recent trend of the stocks of Vietnamese steel companies more worthy of everyone's attention.