Vietnam's Hoa Phat Steel Group has recently commissioned its first 300-metric ton converter during the second phase of expansion at its Dung Quat steel complex. This significant development marks a crucial step in enhancing the production capabilities of one of Vietnam's leading steel manufacturers. The expansion project is comprehensive, involving the installation of two 2,500-cubic-meter blast furnaces, two additional 300-metric ton converters, and various supporting infrastructures. The installation of the blast furnaces commenced in August 2023, with the entire project expected to be completed by the first quarter of 2025.
The expansion is poised to double the crude steel production capacity of the Dung Quat complex, adding an impressive 5.6 million metric tons per year. The two new blast furnaces alone are anticipated to contribute approximately 2.5 to 2.8 million metric tons per year of hot metal capacity. This substantial increase in production capacity will not only solidify Hoa Phat's position in the Vietnamese steel market but also enhance its competitiveness in the broader Southeast Asian region.
As the second hot-rolled coil producer in Vietnam, following Formosa Ha Tinh, Hoa Phat Group plays a pivotal role in the steel supply chain. The Dung Quat plant has established itself as a key supplier, significantly influencing regional price settings for steel products. With the completion of this expansion, Hoa Phat is expected to strengthen its market presence and respond more effectively to the rising demand for steel in both domestic and international markets.
However, the second phase of the expansion could also lead to intensified competition in the hot-rolled coil sector. Several companies in the region, including Eastern Steel and Megasteel in Malaysia, as well as Krakatau in Indonesia, are eyeing opportunities to expand their own HRC production capabilities. This potential influx of competitors highlights the dynamic nature of the steel industry in Southeast Asia, where market conditions can shift rapidly.
