Hoa Phat Group continuously increases the selling price of steel and galvanized steel products

On November 20, 2023, Hoa Phat Steel Sheet Co., Ltd. just announced an increase in selling price of 200 VND/kg for color-coated steel sheets and cold-coated steel sheets (VAT included). Applicable period from November 22, 2023. The reason is that hot rolled raw materials are increasing sharply.

Previously, on November 17, Hoa Phat Hung Yen Steel Co., Ltd. also unexpectedly announced an increase in selling prices for some products. Specifically, the company increased VND 100,000/ton for construction steel coil products in the Northern market, prices do not include VAT. The reason for the price increase given by this manufacturer is due to increased prices of steel billets and input materials.

Hoa Phat’s move to increase selling prices takes place in the context that the average retail electricity price has just been adjusted to increase by 4.5%, to 2,006.79 VND/kWh.

According to estimates by Mirae Asset Securities, electricity costs account for about 9-10% of the cost of goods sold of steel manufacturing enterprises. If businesses cannot pass this on to consumers, the steel industry’s total pre-tax profit will decrease by a maximum of 23%.

Not only electricity prices, input factors of the steel industry are also increasing in price. Coal prices are currently lower than the record level of the same period but still about 1.5-3 times higher than in the 2020-2021 period. From the end of October until now, coal prices have tended to increase compared to September. Similarly, iron ore prices are also tending to increase.

Regarding production and business situation, after 10 months, Hoa Phat has produced 5.43 million tons of crude steel, down 18% compared to the same period in 2022. Steel sales of all kinds reached 5.25 million tons, down 15% over the same period in 2022. % over the same period.

The company has provided the market with 2.9 million tons of construction steel and high-quality steel coils for mechanical manufacturing (drawing wires, making screws, car tires, pre-stressed steel…), reducing 21%, of which exports contributed 600,000 tons, down 44%.

In addition, Hoa Phat also provided domestic and foreign markets with 2.25 million tons of HRC steel, down 2% over the same period last year. Steel pipe products reached an output of 543,000 tons and galvanized steel sheets reached 266,000 tons, down 13% and 3% respectively compared to sales output in the first 10 months of 2022.

With the above results, Hoa Phat recorded VND 84,570 billion in revenue and VND 3,830 billion in profit after tax, down 27% and 63% respectively compared to the same period in 2022.

On the stock market, steel industry stocks have started an upward trend since the beginning of November, in line with the market’s rising rhythm. Particularly, HPG stock is classified by Mirae Asset in the “Good” group – a group with the basic condition that the gross profit margin of the second quarter of 2023 is greater than the gross profit margin of the first quarter of 2023.