Hoa Phat is currently the leading steel producer in Vietnam, offering a wide range of diverse products. (Photo: VNA)
Export challenges have prompted leading Vietnamese steel manufacturers to pivot away from foreign markets and prioritise domestic sales, putting additional strain on trading companies already grappling with inventory backlogs and weak demand.
According to Dau Tu (Investment) newspaper, Hoa Sen Group Chairman Le Phuoc Vu said that for the past decade, exports made up over 60 per cent of the group’s revenue, primarily from markets in the US, Europe and Southeast Asia. But global volatility and protectionist trade policies have led the company to rebalance its sales strategy.
In the first half of the 2024–2025 fiscal year, domestic revenue made up 62.6 per cent of Hoa Sen’s total, a significant jump from 50 per cent in the previous fiscal year.
Nam Kim Steel has seen a similar shift. Chairman Ho Minh Quang noted that global instability caused by trade conflicts is forcing businesses to reorient toward the domestic market. Nam Kim’s local revenue rose from 34.94 per cent in 2024 to 48 per cent by the first quarter of 2025.
Ton Dong A Corporation is also adjusting its strategy. Chairman Nguyen Thanh Trung said the company is targeting high-quality market segments in Vietnam, particularly in infrastructure and recovering real estate. The firm has raised its domestic share from 41.16 per cent last year to over 70 per cent as of May, and aims to surpass 75 per cent by the end of the year.
All three major players – Hoa Sen, Nam Kim and Ton Dong A – are aggressively expanding their presence in the local market, significantly shifting the competitive landscape.
Mounting pressure on trading firms
Steel trading companies were already struggling before the return of major manufacturers. Those supplying the real estate sector have faced financial distress due to delayed payments, capital lockups and high-priced inventory.
SMC Trading Investment Joint Stock Company reported losses of VND 651.8 billion (approximately USD 26 million) in 2022 and VND 925.3 billion in 2023. While the company returned to profitability in early 2025, it posted just VND 126.8 million in profit in the first quarter, a 99.93 per cent drop year-on-year. Its accumulated loss stood at VND 137.7 billion by the end of March, equivalent to 18.7 per cent of its charter capital.
Worryingly, SMC has used VND 854.5 billion in short-term capital to fund long-term assets, raising liquidity concerns. The firm has not yet outlined a plan to resolve its cash flow imbalance, despite setting a revenue target of VND 9.5 trillion and a profit target of VND 30 billion for 2025.
Tien Len Steel Corporation also faces weak performance. Although it avoided consecutive losses, its profit plunged from over VND 30 billion per quarter in 2020–2021 to just VND 2.98 billion in the first quarter of 2025. It still carried an accumulated loss of VND 19.87 billion as of March.
With large volumes of unsold inventory and delayed receivables from real estate partners, trading firms like SMC and Tien Len are likely to face even greater pressure as major producers ramp up their domestic operations.
