Vietnam: Hoa Phat boosts capacity with 6th blast furnace at Dung Quat plant

• Hoa Phat’s annual crude steel capacity rises to 16 mnt
• Capacity expansion threatens Japan’s export prospects

Japan Metal Daily: Vietnamese steel producer Hoa Phat Group has commenced operations at the sixth blast furnace of its Dung Quat Steel Plant in Quang Ngai province. The new unit, with a capacity of 2,500 cubic metres, lifts the group’s annual crude steel capacity to 16 million tonnes (mnt), including 9 million tonnes (mnt) of hot-rolled coils (HRCs). The expansion underscores Hoa Phat’s strategy to strengthen the supply of HRCs for re-rolling in the domestic market.

Industry sources note growing concern in Japan that the surge in Vietnamese HRC production could heighten the risk of anti-dumping (AD) measures, given Vietnam’s previous stance on unfair trade practices.

Expansion details

The Dung Quat complex has been developed in two phases:

• Phase I included four blast furnaces (1,080 cubic metres each) and a thin-slab continuous casting machine.
• Phase II added two larger blast furnaces, converters, Ruhrstahl Heraeus (RH) vacuum degassing, slab continuous casting, and hot-rolling mills.

The facilities incorporate international technologies: Danieli (Netherlands) supplied the blast furnace, SMS group (Germany) provided the converter and RH systems, while Primetals Technologies delivered the continuous casting and hot-rolling mill. These upgrades are aimed at producing higher value-added flat steel products.

Impact

With the completion of the 12-mnt Dung Quat steelworks, Hoa Phat has overtaken Formosa Ha Tinh Steel (FHS) in flat steel production capacity. The addition of Primetals’ hot-rolling mill is expected to enhance product quality, enabling Hoa Phat to compete more directly in rerolling-grade HRC supply.

The expansion could alter trade dynamics in the region. Japan exported over 1.2 mnt of HRC and alloy steel to Vietnam in 2024, making it one of its key markets. However, with Hoa Phat’s rising output and existing AD duties against Chinese steel, competitive pressures are intensifying. Industry observers caution that further trade protection measures could follow, particularly given Hoa Phat’s strong political connections.

Looking ahead, Hoa Phat is also planning a 6-mnt integrated steel plant in Hoa Xuan, Dak Lak province, with potential diversification into new steel grades, including rails. While domestic steel demand in Vietnam remains subdued, the group’s aggressive capacity expansion signals a growing focus on exports to international markets.

Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.