From an enterprise specializing in providing scrap iron sources for steel billet manufacturing businesses to supply to major partners in the industry, the Company is now ready to step into the field of steel billet production.
Sharing about the advantage of expanding the field of steel billet production, HSV said that the business already has a "beautiful" scrap source to choose and use for the production of high-quality steel billets that can compete with current manufacturing enterprises on the market.
According to the opinion of the group of experts, the Construction Materials industry will be the industry that will benefit the most from the trend of promoting investment in infrastructure development from 2021. At present, iron ore and coke are scarce input materials for iron and steel production and steel billets, prices are increasing rapidly, even many manufacturing enterprises cannot buy input materials for production. Analyzing the reasons why domestic steel prices have continuously increased in recent times, the Vietnam Steel Association (VSA) said that the factors affecting domestic construction steel prices mainly come from the sharp increase in raw material prices. Specifically, iron ore price on May 4, 2021 traded at 189.40-189.90 USD/Ton CFR Tianjin port, China, a sharp increase of about 19 USD/ton compared to early April 2021. On May 7, 2021, the trading price of ore was 210 - 212 USD/ton. The September 2021 iron ore contract, the most traded on the Dalian Commodity Exchange (DCE), ended the daytime session 0.7% higher at 1,178 yuan/ton. Similarly, the price of HMS ½ 80:20 scrap steel imported from Dong A port was at 466 USD/ton CFR Dong A on May 4, 2021. This price increased by 24 USD/ton compared to early April 2021. From the beginning of April 2021 until now, scrap prices increased from 430 USD to 500 USD/ton, an increase of 70 USD after one month. The SZZFN1 iron ore contract delivered in July 2021 on the Singapore Exchange (SICOM) was also adjusted up 2.1%, recording 209.10 USD/ton on the same day.
Thus, the amount of steel produced domestically only meets about 30% of the market share, the rest depends entirely on imported raw materials mainly from China. However, the Chinese market is restricting the export of embryos to adjust price increases, which makes importing countries including Vietnam passive in terms of raw materials. Watch more details in relation to no deposit bonus codes. "It is expected that in 2021, Vietnam will continue to import many types of raw materials to produce steel such as iron ore for blast furnaces, about more than 18 million tons, and scrap steel about 6 - 6.5 million tons for electric furnaces," VSA emphasized.
The increase in steel prices comes not only from rising raw material prices but also from a lack of supply, especially in the US and European markets. In addition, the tense trade situation between countries around the world, the impact of the Covid-19 pandemic, and the trend of increasing trade protection are also reasons affecting steel prices.
This is the opportunity and advantage of HSV when the business has a ready source of replacement goods for input materials, which is convenient for the production expansion process. Currently, Hanoi Iron and Steel Company has begun the process of producing finished products for export.
In a previous announcement from HSV, the Company's production capacity reached about 40,000 tons/year. With the profit margin of steel billet manufacturing businesses ranging from 10-15%, steel billet production activities will bring sudden profits to businesses in the second quarter and can exceed the yearly profit plan that businesses set. Besides the domestic customer network such as Hoa Phat Hung Yen Steel Company Limited, Thai Nguyen Iron and Steel Joint Stock Company, Southern Steel One Member Company Limited,
Nghi Son Iron and Steel CTP..., HSV is also a steel billet supply partner for Kyoei Vietnam Steel Company (Ninh Binh). This shows that HSV aims for finished product quality that meets international ISO standards and future export markets.
In terms of inventory sources to serve production, HSV said that the Company currently has a plan to store a large amount of cheap inventory. As for the Company's scrap steel supply partners, prioritizing the stabilization of input prices and sales sources is a prerequisite in a long-term cooperative relationship. This is one of HSV's advantages in producing steel billet as well as providing scrap iron to production partner businesses.
Also in early June 2021, HSV submitted documents to the State Securities Commission to increase its charter capital through a plan to issue shares to the public. Accordingly, HSV will issue 5 million shares, corresponding to an implementation rate of 100% to increase charter capital to 100 billion VND. The offering price is 10,000 VND/share, equivalent to the expected mobilized amount of 50 billion VND.
In parallel with the strategic step of diversifying business lines, HSV plans to expand the company's activities related to sand mining in the near future. With the goal of reaching new heights, HSV has carefully prepared with careful and appropriate steps at each time.
Source: https://cafef.vn/gang-thep-ha-noi-hsv-lan-san-san-xuat-phoi-thep-20210615170503835.chn