Steel output in Vietnam dropped 11.9% year-on-year last year to 29.34 million tons, while sales fell 7.2% to 27.3 million tons, the Vietnam Steel Association (VSA) reported.
The VSA attributed the worse performance to the shrinking domestic market and complicated movements of steel material prices, despite the country’s impressive economic growth of 8.02% in the post-pandemic recovery period.
In 2022, Vietnam spent $11.92 billion on importing 11.68 million tons of steel products, up 3.04% year-on-year in value but down 5.62% in value. Major suppliers to the country were mainland China with 41.65% of the total, Japan with 15.06%, South Korea with 12.27%, Taiwan with 8.84%, and India with 6.5%.
Vietnam earned $7.99 billion from exporting 8.4 million tons of steel in 2022, down 32.2% and 35.85% year-on-year, respectively, per the VSA report. Major export destinations were ASEAN with 36.22% of the total, the EU with 18.37%, the U.S. with 10.57%, and South Korea with 6.8%.
In line with worse performance of the sector, listed steel firms recorded poor performances last year.
Hoa Sen Group
Hoa Sen Group, Vietnam's leading steel sheet producer, recorded a post-tax loss of VND680.23 billion ($28.99 million) in the last quarter of 2022, versus post-tax profit of VND638.32 billion ($27.2 million) in Q4/2021, according to the firm’s financial report.
The corporation, listed on the Ho Chi Minh Stock Exchange (HoSE) as HSG, posted a revenue VND7,917 billion ($337.38 million) in Q4/2022, down 53% year-on-year.
HSG clarified the fall in post-tax profit was due to the drop in gross profit, as a result of the decrease in gross profit margin.
Nam Kim Steel
Nam Kim Steel, another major steelmaker in Vietnam (HoSE: NKG), made a loss of VND66.7 billion ($2.84 million) in 2022, its first loss in 10 years, with net revenue reaching VND23,071 billion ($983.8 million), down 19% year-on-year.
The firm's most recent loss was more than VND105 billion ($4.48 million) in 2021.
Its net revenue in Q4/2022 was VND4,299 billion ($183.3 million), a 51% drop against the same period in the previous year, while profit after tax was negative VND356.3 billion ($15.19 million).
Vnsteel
Vietnam Steel Corporation (Vnsteel), a leading steelmaker, reported a loss of VND822 billion ($35 million) in 2022, while its profit hit VND859 billion ($36.63 million) the previous year.
The company, on the unlisted public company market UPCoM as TVN, recorded revenue of VND38,732 billion ($1.65 billion), down 5% year-on-year, according to its Q4 consolidated financial statement.
Notably, its joint ventures and associates posted a loss of VND734,800 billion ($31.33 million) in 2022, while 2021 saw a profit of VND155.7 billion ($6.64 million).
Hoa Phat Group
Hoa Phat Group, the largest Vietnamese steelmaker, recorded a post-tax profit of VND8.4 trillion ($358 million) in 2022, down 76% year-on-year.
For Q4/2022, it reported a post-tax loss of VND2 trillion ($85.29 million), worse than the Q3/2022 loss of VND1.79 trillion ($76.33 million), according to its financial report.
For the whole 2022, the group (HoSE: HPG) posted a revenue of VND142 trillion ($6.06 billion), falling 5% year-on-year, after recording a Q4 revenue of VND26 trillion ($1.11 billion), down 42%.
Thai Nguyen Iron And Steel JSC
Thai Nguyen Iron And Steel JSC, (UPCoM: TIS), saw a post-tax loss of VND9.46 billion ($403,100) in 2022, versus a post-tax profit of VND122.41 billion ($5.22 billion) a year ago.
The firm's revenue decreased to VND11,697.21 billion ($498.45 million) in 2022 from VND12,850 billion ($547.57 million) in 2021.
Domestic steel demand is expected to continue falling due to the stagnant real estate market and tightened monetary policy, according to Vietnam's leading broker SSI Securities.
Citing data from the Ministry of Construction, SSI Research said that the number of apartments licensed for construction in the first three quarters of 2022 plunged by 41% year-on-year. In addition, the implementation of backlogged projects may also be delayed as investors are facing liquidity problems.
The brokerage house believed that the domestic demand for finished steel products may suffer a single-digit decline in 2023. However, the acceleration of public investment may help offset some of the reduced steel demand from households.