Production and business activities of steel enterprises are “brighter”. It is expected that from 2025 onwards, the steel industry will have high growth momentum again.
Seeing the recovery momentum of steel enterprises
The profits of steel industry enterprises in the third quarter of 2024 recorded a very high growth rate compared to the same period. First of all, Hoa Phat Group Joint Stock Company (HPG) must be mentioned. Specifically, Hoa Phat recorded impressive growth results in the third quarter of 2024 with revenue increasing by 19% to more than VND 33,956 billion and profit after tax increasing by 51% over the same period, reaching VND 3,021 billion.
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| The steel market is likely to continue to recover thanks to good economic growth and promoted public investment activities. Photo: VSA |
Accumulated in the first 9 months of 2024, HPG's revenue reached 104,364 billion VND, profit after tax reached 9,210 billion VND, up 23.4% and 140% over the same period last year.
In 2024, HPG aims to achieve revenue of VND140,000 billion and after-tax profit of VND10,000 billion. Thus, after 9 months, Hoa Phat has completed 75% of the revenue plan and 92% of the annual profit plan.
Hoa Phat said that increased sales revenue and improved profit margins in some business areas such as steel and agriculture have helped the Group's profits grow. Of which, the steel group's profit increased by 42%, and the agriculture group's profit increased by 80% compared to the same period last year. The industrial park infrastructure leasing sector maintained a stable profit margin of 39%.
Also reporting impressive financial results in the third quarter of 2024 is Nam Kim Steel Joint Stock Company, specifically Nam Kim recorded net revenue in the third quarter of 2024 reaching VND 16,208 billion, an increase of 14.51% over the same period last year; profit after tax reached VND 434.5 billion, a growth of 296%, nearly 4 times higher than the same period.
Nam Kim said that during the period, the Company promoted domestic and export sales channels, with revenue increasing by 14.51%, 4.65% higher than the increase in cost of goods sold. Thus, with the 2024 business plan of VND 21,000 billion in revenue and VND 420 billion in after-tax profit, after 9 months, Nam Kim completed 77% of the revenue plan and exceeded the profit target by 3.5%.
According to MB Securities (MBS), the pressure from Chinese steel has eased as the country has implemented economic stimulus measures, and domestic steel prices are expected to recover thanks to increased domestic demand. At the same time, public investment disbursement and improved housing supply will contribute to supporting domestic steel prices.
Although steel prices showed signs of improvement in October, this upward momentum is not yet stable, but macro and domestic factors promise a positive outlook for the Vietnamese steel industry in the last quarter of 2024.
"Support" in the last months of the year
Regarding this issue, Mr. Pham Cong Thao, Deputy General Director of Vietnam Steel Corporation, said that according to the forecast of the World Steel Association, the demand for finished steel in 2024 will grow by 1.9% compared to 2023, of which the steel consumption demand of the European region will grow by 5.7% (this is also one of the largest steel export markets of Vietnam), and the ASEAN region will grow by 5.2%.
In Vietnam, according to the assessment of the Vietnam Steel Association, the steel industry is likely to recover weakly in 2024 due to the difficulties in the real estate market that still exist (the largest steel consuming sector in Vietnam). Steel consumption is forecast to increase by 7% to 21.7 million tons, output could reach nearly 29 million tons, up 7% compared to 2023.
Some experts also believe that in the coming time, the Chinese real estate market may recover more clearly, leading to increased demand for both raw materials for steel production and finished steel products, leading to increased selling prices, affecting steel prices in the Vietnamese market. At that time, steel enterprises that have previously stocked low-priced raw materials will benefit, with better profit margins.
Of course, the increased demand for steel in Vietnam thanks to the "warming up" of the real estate market and the promotion of public investment projects is an important factor helping domestic steel prices recover.
In the domestic market, the steel market is expected to recover thanks to the growth of the real estate market and public investment projects. Accordingly, the construction industry, which accounts for 60% of steel demand, is also gradually overcoming difficulties, creating a foundation for steel demand growth in the coming quarter.
In the immediate future, to "revive" the steel industry, according to economic experts, ministries, sectors and localities need to step up the implementation of public investment projects; remove difficulties for the real estate market, and lead and attract investment from the whole society to increase total demand for the steel industry.
At the same time, urgently and effectively implement regional and local planning and national sectoral planning, including 4 sectoral planning in the fields of energy and minerals, contributing to creating demand for consumption and exploitation and processing of minerals for steel production.
At the same time, it is necessary to promote trade promotion; build and protect the brand for Vietnam's steel industry; support steel production and trading enterprises to effectively exploit incentives from free trade agreements of which Vietnam is a member and international economic links to develop the market, expand and diversify steel export markets, as well as seek sources of raw materials with reasonable prices from abroad...
The Ministry of Industry and Trade has recently requested industry associations to promote their role as bridges and support steel production and trading enterprises; strengthen forecasting and provide information on iron and steel demand, especially construction steel for enterprises to balance steel demand for domestic and export markets; actively support steel enterprises to be proactive in production, balance domestic consumption and export of steel products to improve production and business efficiency.
In addition, the steel industry is expected to focus on upgrading steelmaking technology, optimizing production processes, and promoting recycling to transform from an energy-intensive industry to a low-carbon model. These advances will not only help the steel industry cope with the challenge of the European Union's Carbon Border Adjustment Mechanism (CBAM), but also meet the urgent demand from downstream industries, especially the automotive industry, for environmentally friendly steel materials.
| The Vietnam Steel Association (VSA) forecasts that Vietnam’s steel production could increase by 10% in 2024 and 8% in 2025, as domestic demand for steel recovers. This is partly due to the increased disbursement of public investment capital in the transport infrastructure sector. |
Source: https://congthuong.vn/nganh-thep-sang-cua-tang-truong-nhung-thang-cuoi-nam-356677.html
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