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Hoa Phat to open Dung Quat 2 steel factory this year

Vietnam's leading steel manufacturer, Hoa Phat Group, is aiming to complete its new facility this year to meet the growing demand from the country's rapidly expanding automotive industry. The new $3.38 billion facility is being constructed in the Dung Quat economic zone and will increase the annual raw steel production capacity by 60% to 14.5 million tons.

Hoa Phat to open Dung Quat 2 steel factory this year

With the completion of the Dung Quat 2 steel factory, Hoa Phat's capacity for hot-rolled coil steel production will significantly increase. This facility will particularly focus on producing high-quality steel for the automotive sector, seen as a move to address the growing needs of Vietnam's domestic demand.

The demand for hot-rolled coil steel in Vietnam is approximately around 13 million tons, and efforts are being made by Hoa Phat and other leading companies in the country's steel industry to meet it. With the construction of the new facility, Hoa Phat aims to better respond to domestic demand and increase its steel production capacity to meet the rising demand in the automotive industry.

However, the decline in revenue from construction steel business and challenges in Vietnam's real estate sector highlight the need for diversification by Hoa Phat. The decrease in local property prices is one of the factors influencing Hoa Phat's decision to focus on higher value-added steel products.

Meanwhile, the influx of low-cost Chinese hot-rolled coils into Vietnam is affecting the local steel industry and sparking debates over the implementation of anti-dumping measures. However, the recovery of the national real estate market may take time, and companies in the sector may continue to face challenges.

With the completion of Hoa Phat's new facility targeting the automotive industry, Vietnam's steel industry could become more competitive and better serve the country's rapidly growing automotive sector.

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SteelRadar Insight - Sayı 1 (Haziran 2024)

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