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According to forecasts by MB Securities, Vietnam's major steel companies such as Hoa Phat, Ton Dong A, and Nam Kim (NKG) are expected to achieve double-digit profit growth in the third quarter of 2025, while Hoa Sen's profits are even expected to grow by more than 200% year-on-year, X46M steel.
Steel Prices and Production Rebound:
In its latest research report on the steel industry for the third quarter, MBS pointed out that the rebound in domestic steel prices and production growth in Vietnam were the two main drivers of improved performance for steel companies.
Vietnam's domestic steel production in the third quarter is expected to increase by 21% year-on-year, reaching 6.3 million tons; X46M steel, of which construction steel and hot-rolled coil (HRC) accounted for 65% of total production.
MBS analyst Le Hai Thanh stated that with Hanoi and Ho Chi Minh City's real estate supply expected to rebound by over 30%, coupled with strong public investment growth (projected to increase by 18% by 2025), construction steel consumption is expected to increase by 10% year-on-year in the third quarter.
With the Dung Quat 2 steel plant phase 2 project in Hoa Phat Quang Ngai province officially commencing production in the third quarter, the overall market share of domestic steel companies in Vietnam has increased to over 60%, and hot-rolled coil consumption is expected to increase by 48% year-on-year, reaching 1.7 million tons.
MBS also predicts that local hot-rolled coil producers such as Hoa Phut and Formosa Ha Tinh Steel will further expand their market share, as China may face stricter controls on imports of wide-gauge hot-rolled coils.
On the other hand, Vietnam's steel exports remain sluggish due to weak demand in major target markets such as Europe and the United States, with exports expected to decline by 10% year-on-year in the third quarter.
In the third quarter, domestic steel prices in Vietnam rebounded slightly, while raw material prices such as coal and iron ore remained low, which helped improve the industry's overall gross margin.
Hot-rolled coil prices rose 2% quarter-on-quarter in the third quarter, while construction steel prices rose 3% quarter-on-quarter, but remained flat year-on-year. X46M steel, MBS believes this trend reflects strong domestic demand in Vietnam and improved competitiveness of domestically produced steel compared to Chinese products, supported by anti-dumping measures.
MBS also predicts that domestic steel prices in Vietnam will continue to rise in the fourth quarter, benefiting from the seasonal peak, continued public investment, and the launch of new real estate projects.
In the third quarter, Vietnamese steel mills continued to benefit from the low-priced raw material inventories purchased in the second quarter. With weak industrial demand in China, coal and iron ore prices are expected to decline by 6% and 5% year-on-year, respectively, resulting in a supply surplus of raw materials.
Therefore, the steady operation of steel prices and the decline in raw material prices jointly drove a significant rebound in the industry's gross profit margin, becoming the main highlight of the steel industry in the third quarter.
