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Table 15: Large-scale steel projects in the pipeline in Vietnam

Project
1. Southern Steel
Sheet Co.

Annual design capacity

Location

Start
date

Operating
date

Investment

150,000 tonnes of metallic &


colour coated

Dong Nai

2013

Jun 2015

USD 70mn

Binh Duong

Nov 2013

Nov 2015
(phase 1)
2016-17
(phase 2)

USD 150mn

2. Dong A Sheet JSC

800,000 tonnes of CRC

3. Formosa Ha Tinh
Steel Co. (FHS)
(phase 1)

7mn tonnes of crude steel


(hot-rolling mill, blast furnaces
and steelmaking facility)

Ha Tinh

n/a

mid-2016

USD 10.5bn
(phase 1)

4. TISCO (phase 2)

500,000 tonnes of billets (EAF)

Thai
Nguyen

resume in
2015

n/a

USD 383mn

5. Hoa Sen Group


Binh Dinh Steel Pipe
Plant (2 phrases)

100,000 tonnes steel pipes

Bihn Dihn
Province

n/a

2015
onwards

VND 200bn

6. Hoa Sen Group


(HSG) Nghe Ah Steel
Sheet Plant (3
phases)

100,000 tonnes steel pipes;


100,000 tonnes slitting steel;
100,000 tonnes colour coated;
400,000 tonnes galvanised;
400,000 tonnes cold-rolling

Nghe An
Province

Sep 2014

Aug 2018

VND 2.3bn

Source: Ministry of Trade and Industry

2.4

Steel Industry Development Master Plan

In January 2013, the Vietnamese government approved the Steel Industry Development Master
Plan for 20152020, and spanning to 2025. The main objective of the plan is to satisfy all
domestic demand for steel products as well as to make steel available for export to other
countries.
According to earlier estimates by the Ministry of Trade and Industry, domestic demand for
finished steel aims to reach 16mn tonnes in 2015 and 24mn tonnes in 2020. Meanwhile, the
output of finished steel is expected to reach 13mn tonnes in 2015 and 23mn tonnes by 2020.
The development of the steel industry will be supported by continuous high economic growth in
the country.
Besides fulfilling domestic demand, Vietnam will also export steel products. In terms of all kinds
of steel, the country targets to increase export proportion into 15% of production, while reducing
import volume to 35% of consumption by 2015.
In order to ensure that the planned objectives are met, Vietnam has to invest considerably in the
development of its steel industry. During 20072025, the country will need USD 1012bn for
investment in steel mills, of which USD 8bn will be used in 20072015. Besides, Vietnam will
also need to invest in small- to medium-scale cast iron blast furnaces in northern mountainous
areas, including Lao Cai, Tuyen Quang, Cao Bang, Ha Giang, Yen Bai and Bac Kan provinces,
with total capacity of 1mn tonnes per year.
In 20162025, the industry will focus on producing steel from directly reverted products with the
capacity of 1.5mn tonnes of flat steel ingot or 1.5mn tonnes of hot-rolled steel. It will study the

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13

development of several shaped steel plants with expected annual capacity of 1mn tonnes and
build special steel mills with annual output of 300,000500,000 tonnes.
Table 16: Vietnams Steel Industry Development Master Plan targets (2015-2025)
Capacity

Unit: mn tonnes per year

2012

Production

2015

2020

2025

2015

2020

2025

Pig iron, spongy iron

1.9

9.5

23.5

33.3

6.0

17.0

28.0

Semi-finished casting
Billet
Slab
Finished products
Long products
Hot rolled coil
Export (% of production)

7.7
7.7
12.5
11.9
0.6

21.3
15.3
6.0
15.0
10.5
4.5

42.0
24.0
18.0
35.5
16.5
19.0

51.1
25.6
25.5
42.5
18.7
23.9

12.0

25.0

40.0

13.0

23.0

39.0

15%

20%

25%

35%

25%

15%

Import (% of consumption)
Source: Master plan

2.5

Prices

China steel prices are languishing at record lows amid severe overcapacity. Benchmark steel
rebar prices on the Shanghai Futures Exchange hit a record-low of around USD 270 in
November 2015, down by a third from a year ago. The slump in steel prices is also hitting the
price of iron ore. Iron ore for delivery was trading around USD 50 per tonne in the same period.
Due to overcapacity, Chinese steelmakers are exporting a large amount to other markets at low
prices, hurting the sector as to what is perceived as dumping. This further caused local steel
mills to reduce prices of billet and scrap, according to the VSA.
Industry players forecast steel prices to tend lower in Q4/2015. Iron ore, slab and HRC prices
are expected to decrease to the range of USD 43-50/tonne, USD 250-280/tonne and USD 260340/tonne, respectively.
Chart 7: HRC and raw material prices (Q1/2014-Q4/2015)
600

USD per tonne

500

543
522

528
514

400

508
465

450
448

413

300

354

357
320

300
290

300
265

62

58

53

50

200
100

121

105

89

76

0
Q1/14

Q2/14

Q3/14
HRC

Q4/14

Q1/15

Slab

Q2/15

Q3/15

Q4/15F

Iron Ore

Note: HRC = FOB China; Slab = CFR East Asia Import Prices; Iron ore = IODEX 62% Fe CFR China
Sources: Platts, Steel Business Briefing, Sahaviriya Steel Industries PCL (SSI)

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