Vietnams steel major Hoa Phat 'confident' about China competition

Senior officials of major Vietnamese steel maker Hoa Phat are confident that the company can deal with Chinese competition, given the attention they’ve paid to their costing.

The officials expressed their confidence while answering questions from more than 200 investors at the Hoa Phat Dung Quat complex in Quang Ngai province on Tuesday.

“How will the firm deal with cheap steel prices from China" was the most prominent and concerning question at the meet.

Nguyen Viet Thang, general director of Hoa Phat, which is listed on the HCMC Stock Exchange (HoSE) as HPG, answered that competing with Chinese steel has been a top priority for the firm since early days.

China was the world's largest steel producer, producing over 1 billion tons per year; and it was also the world's largest consumer of steel, he noted.

Thang said that when China was growing at 7-8% per year in the past, it was consuming large amounts of steel and only exported a small amount. But the situation has changed since the Covid-19 pandemic broke out.

Over the past three years, China's economy has slowed significantly, especially amidst a real estate crisis. The situation has created a big surplus of steel, requiring Chinese enterprises to export more. As a result, competition has heated up.

Thang acknowledged that the competitive pressure from Chinese steel has become more apparent of late. Vietnam imported almost 1.8 million tons of iron and steel from China in the first two months of 2024, a threefold increase year-on-year, accounting for 70% of overall imports.

However, Thang said he was certain that Hoa Phat can compete with Chinese steel since “we have always kept an eye on production costs.

“With the global raw material structure, Hoa Phat steel can completely compete with Chinese steel."

Anti-dumping tax

While Hoa Phat’s executives showed confidence in their ability to compete with products from China, they expressed worries about unfair competition.

After suffering losses the previous year, many Chinese steel companies were ready to sell their products for very low prices in order to make ends meet.

Reiterating Hoa Phat’s confidence, Thang said: “We only object when there is unfair competition."

Hoa Phat and Formosa, another steel major, have submitted a proposal on March 19 to impose an anti-dumping tax on HRC steel from China, Thang stated.

"As far as Hoa Phat is concerned, our position is straightforward: we will urge agencies to assist the homegrown manufacturing sector if we see indications of dumping. We think the government will support, as steel is the industry's backbone.”

The petition for anti-dumping duties on HRC steel is being reviewed by the Ministry of Industry and Trade for authenticity and comprehensiveness.