What will drive steel stocks to power ahead?

In Q2 2025, domestic steel consumption is expected to jump 22% year-on-year to approximately 7.1 million tons, according to MBS Securities. This growth has been supported by accelerated public investment disbursement and a nascent recovery in the property market.

MBS analysts forecast that construction steel alone will reach 3.1 million tons of consumption, up 14% YoY. Leading producer Hoa Phat Group (HPG) could increase its output by 15% over the same period.

For hot-rolled coil (HRC), temporary anti-dumping tariffs of 19–28% imposed on Chinese steel have narrowed the price gap between Chinese and Vietnamese HRC to just $50/ton, improving the competitiveness of local HRC. HPG reported that the proportion of domestically sourced HRC used in its galvanized steel production rose from 15–20% to 40% in Q2, thanks to output from its Dung Quat 2 plant and favorable tariff policies. As a result, HPG’s Q2 HRC production may reach 2.2 million tons—a 40% YoY increase.

However, exports are under pressure. Industry-wide steel exports are expected to drop 20% YoY to 1.5 million tons, as the EU and U.S. impose new anti-dumping duties on Vietnamese products. Despite that, domestic steel prices have held steady amid strong demand and government support policies, with construction steel prices rising just 1% quarter-over-quarter. Meanwhile, input costs for key raw materials such as iron ore and coal fell 3% and 4% YoY, respectively, due to oversupply from Australia and Brazil—providing a cushion for profit margins.

Analysts predict a significant improvement in industry-wide gross margins in Q2 2025, thanks to this combination of stable selling prices and declining input costs.

Hoa Sen Group: Leading the Domestic Charge

A prime example of domestic-led growth is Hoa Sen Group (HSG), Vietnam’s top galvanized steel producer. For Q3 of its 2024–2025 fiscal year (April 1 to June 30, 2025), HSG estimates consolidated sales volume at 474,112 tons, with consolidated revenue at VND 9.5 trillion and after-tax profit of VND 274 billion.

For the first nine months of the fiscal year, HSG has achieved 73% of its annual sales volume target (1.42 million tons), 74% of revenue (VND 28.2 trillion), and an impressive 129% of its high-end profit target (VND 647 billion), far exceeding the company’s base-case forecast of VND 400 billion.

Looking ahead to Q4, HSG says it will continue implementing a synchronized strategy across production and sales to meet full-year goals while maximizing long-term shareholder value. The company also aims to enhance after-tax profit results through strategic diversification.

Despite ongoing anti-dumping and countervailing duty investigations launched by the U.S. Department of Commerce in September 2024, HSG stated that U.S. tariff policies have not materially disrupted its operations. While exports of galvanized steel to the U.S. have been temporarily suspended, the company continues to maintain its global footprint, serving over 90 countries and territories, backed by a flexible business model and strong compliance with international trade rules.

Domestically, HSG is not only capitalizing on its core strengths in steel, pipe, and plastic production but also expanding its retail footprint through the Hoa Sen Home chain, which offers a wide range of construction and interior materials. This nationwide retail strategy has become a key growth engine, further leveraging HSG’s integrated production and distribution network.

HSG also reported that its book value per share reached VND 18,660, reinforcing investor confidence.

Market Optimism Spurs Steel Stock Rally

The steel sector’s performance estimates and improving fundamentals have fueled a strong rally in steel stocks. HPG remains a top pick for investors amid expectations that it will supply steel rails for Vietnam’s planned North–South high-speed rail project. Meanwhile, HSG has emerged as a key outperformer in the sector.

According to technical analysis by TPS, HSG’s stock recently broke out of two long-term downward trendlines and a short-term ascending triangle pattern—technical indicators that suggest a strong recovery from its previous lows. Theoretical price targets could reach VND 22,600 per share.

TPS notes that HSG is currently testing the 200-day moving average at around VND 17,500. As long as there is no heavy selling pressure pushing the price below VND 16,800, the bullish scenario remains intact. Following the company’s release of its 9-month financial performance, HSG shares rose 0.85% on July 15 to close at VND 17,900—still slightly below book value but reflecting improving sentiment.