AME’s finished steel demand forecast for Vietnam in 2022 is 26.5Mt, up 5% year on year. Vietnam’s steel consuming industry is significantly skewed towards construction represent 93% of total finished steel demand. While other main industries of shipbuilding and automotive account for 4% and 2%, respectively of total finished demand.
In early 2022, the
National Assembly approved a socio-economic recovery package of US$15.2bn. Of the total, US$5bn will be allocated towards infrastructure development, including the
Eastern North-South expressway, Long Thanh International Airport, and large
logistical hubs. The Eastern North-South expressway has a total road span of
653km, with 360km expected to be completed in 2022.
In mid-2022, The Ministry
of Transport (MoT) approved 12 sub-component projects for the Eastern
North-South expressway project in 2021-2025, with investment of US$6.3bn. The
new sub-components will cover a total length of 724km with construction
commencing by end of December 2022.
AME’s finished
steel demand forecast for Vietnam in 2027 is 37.5Mt, up a moderate 5.8% from
the prior year. Under Vietnam’s Eastern North-South expressway project the
government is planning to have at least 4,000km of expressway completed by
2025.
Long Thanh International Airport commenced construction in early 2021 and
is located 40km east of Ho Chi Minh City. The first phase of the project will
have investment of US$7.8bn, with 25 million passage capacity per year, and 1.2Mtpa of cargo. The first phase is scheduled for completion
by 2025.
Vietnam
Electricity Group (EVN) is a state-owned enterprise which hold a monopoly on
transmission and distribution. According to the Institute of Energy of Vietnam
(IEV) (March 2021 report) installed power generation capacity in Vietnam is
56GW, with total installed power supply capacity of 69GW (including hydroelectric
plants imported from Laos and rooftop solar power). Vietnam’s electricity
capacity is expected to have an average annual increase of 5.7% from 2021 to
2030, totalling 130GW.
AME’s finished steel demand forecast for Vietnam in 2040 is 69Mt. This equates
to an average long-term (2028-2040) growth rate of 5.2%. Under Vietnam’s
Eastern North-South expressway project, the government is planning to have at
least 8,000km of expressway completed by 2050.
Under the second phase of the Long
Thanh International Airport project, a second runway will be build and expand passage
capacity per year to 50 million,
with cargo capacity to 1.5Mt. The third phase of Long Thanh
International Airport will see passage capacity reach 100m passengers
and 5Mtpa of cargo. Phases two and three are expected to
require investment of US$8.2bn.
In 2020, the
Vietnamese government approved its first law on public-private partnerships
(PPP), taking effect from 1st January 2021, with the
aim of attracting international investment. Vietnam’s Transport Infrastructure
Master Plan from 2021-2022 has an estimated cost of US$43-US$65bn. As Vietnam
aims to increase its manufacturing capacity it is vital its roads, airports,
seaports, and rail connections can facilitate this increase.

Vietnam is aiming to be carbon neutral by 2050. Under its 2020 Nationally
Determined Contribution (NDC), the business as usual scenario expects GHG
emission to be 928MtCO2e by 2030. According to the World Bank, Vietnam’s carbon emissions
have increased from 19MtCO2e in 1990 to 221MtCO2e in 2015. The country’s carbon
emissions in 2020 were 322MtCO2e.
Since 2013, Vietnam has had an energy partnership programme with Denmark, which is currently in its third phase. The two governments' responsible for the
programme includes the Vietnamese Ministry of Industry and Trade and Danish Energy
Agency. A new agreement on the Danish Energy Partnership Programme for
2021-2025 (DEPP III) was signed in October 2021, with a grant of US$10m from
Denmark to provide technical assistance to support
The partnership entails continued collaboration on energy planning, integration of renewable
energy into the power grid and economical and effective use of energy in the
industrial sector. Offshore wind energy development will continue to be an
important area of the programme.
Vietnam’s climate commitments, as a result of the COP26 meeting held in
Glasgow, includes transitioning from fossil fuel to green/clean renewable energy
sources and reducing its greenhouse gas emissions. Funding for its renewable
energy sector is expected to require US$24bn by 2030. Vietnam has plans to reduce
its reliance on coal fired power generation. While the country’s electricity
demand is expected in increase 9% annually to 2025.
According
to the Ministry of Industry and Trade of Vietnam the draft proposal for the
national power development plan VIII (PDP8) for the period of 2021-2030 with a
vision to 2045 includes significant ramp up in renewable energy. Solar power
will reach 17-18GW in 2025 and 18-22GW by 2030. While wind power will reach
11-12GW in 2025 and 12-14GW in 2030.
For its vision to 2045 solar power
capacity is expected to reach 52-63GW or up to 19.5% total installed capacity.
While wind power capacity will increase to 48-69GW or up to 21% of total
installed capacity.

A
major steel producer that will benefit from the government infrastructure and
future renewable energy projects is Hoa Phat Group. Its steel operations have
been expanding rapidly in recent years with a goal to achieve crude steel
output of 14Mt by 2025. The company’s construction steel is used in the
government’s Eastern North-South highway project.
For the six months of 2022, the company reported its construction steel volume was 2.38Mt, up 29% year on
year. Hoa Phat Group commenced operations in 1992, and expanded into steel pipe
in 1996, followed by construction steel in 2000. The company was subsequently
listed on the Ho Chi Minh Stock Exchange in 2007.
The
Hoa Phat Group’s revenue is dominated by its steel production accounting for 90%
of total company revenue. The company’s steel production includes segments of
Iron and Steel – construction steel, hot-rolled coil and Steel Products – steel
pipe, galvanised steel sheets, wire rod, container shell and pre-stressed bar.
The
remaining non-steel related segments of Hoa Phat Group include Agriculture,
Real Estate and Home Appliances. The group’s revenue has increased steadily from
2011 at US$876m to US$2.46bn by 2018. While the commissioning of the Group’s Hoa
Phat Dung Quat Steel Complex, in Binh Dong has saw revenue jump to US$3.92bn in
2020 and US$6.56bn in 2021. Hoa Phat’s steel production has grown from 300kt in
2001 to 2Mtpa in 2016 and currently in 2021 to 8.5Mtpa.
In terms of sustainable
development, Hoa Phat Group automatically and continuously monitors its emission
from its blast furnaces iron smelting, sintering, and steelmaking. The coke
plant utilises coke dry quenching which allows the heat to be recovered to
generate the electricity. All the dust from the dust filter system is recycled
and transferred to the sintering stage to make raw materials.
Hoa Phat Dung Quat Steel
Complex has 14 automatic and continuous monitoring stations for emissions and wastewater.
This information is transmitted to the Department of Natural Resources and
Environment of Quang Ngai province.
Formosa Ha Tinh Steel Corporation
also has a large market present in Vietnam and produced the first batch of 1Mt
of steel in late 2017. Prior to operating in 2016, the company was responsible
for the country’s worst ever environmental disaster.
The steelmaker released
toxic chemicals which polluted the coastline of four provinces and impacted an
area of 200km. This disaster killed 115t of fish and affected the Vietnamese
fishing and tourism industries.
The steel complex is owned by
Formosa Plastics Group (70%), China Steel Corporation (25%) and JFE Holdings
(5%). The facility currently has a crude steel capacity of 7Mt, with future
plans to expand to 10.5Mt and 21Mt by 2024 and 2029, respectively. However,
since the Covid pandemic no specific expansion plans have been confirmed by the
company.