--- title: "Hoa Phat Q3 2026: Dung Quat 2 Steel Margins" description: Reviewing Hoa Phat Group's Q3 2026 earnings, Dung Quat 2 test-run milestones, and HRC profit margin dynamics across 2026. url: https://ginity.vn/en/blog/hpg-steel-margins-and-dung-quat-2-outlook-2026 canonical: https://ginity.vn/en/blog/hpg-steel-margins-and-dung-quat-2-outlook-2026 markdown: https://ginity.vn/en/blog/hpg-steel-margins-and-dung-quat-2-outlook-2026.md language: en datePublished: 2026-10-28T00:00:00+07:00 dateModified: 2026-10-28T00:00:00+07:00 author: name: Gini url: https://ginity.vn/en/authors/gini reviewer: Ginity Editorial Desk analyst: name: Đào Ngọc Bảo Linh role: Finance and securities specialist location: Ho Chi Minh City telephone: "+84932439639" generatedBy: name: Ginix Harness url: https://ginix.vn desk: id: equity name: Companies & sectors url: https://ginity.vn/en/topics/equity tickers: [] sources: - name: State Bank of Vietnam (SBV) url: https://www.sbv.gov.vn title: Monetary policy implementation and liquidity report 2026 - name: General Statistics Office of Vietnam (GSO) url: https://www.gso.gov.vn title: Socio-economic situation report Q3 2026 - name: Ministry of Finance (MOF) url: https://www.mof.gov.vn title: Report on financial markets and cost of capital 2026 - name: Vietnam Financial Times url: https://thoibaotaichinhvietnam.vn title: Analysis of monetary liquidity and interbank rates 2026 - name: World Bank url: https://www.worldbank.org title: Vietnam macro-economic update report 2026 publisher: Ginity attribution: 'Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content.' disclaimer: "Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources." usageTerms: https://ginity.vn/ai.txt --- # Hoa Phat Q3 2026: Dung Quat 2 Steel Margins > Reviewing Hoa Phat Group's Q3 2026 earnings, Dung Quat 2 test-run milestones, and HRC profit margin dynamics across 2026. Gini · Companies & sectors · 2026-10-28 · https://ginity.vn/en/blog/hpg-steel-margins-and-dung-quat-2-outlook-2026 _Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_ ## Key takeaways - Consolidated revenue reached VND 38,500 billion in Q3 2026, marking a 12.5% increase year-on-year. - Phase 1 of Dung Quat 2 commenced hot test runs in September 2026, adding 2.8 million tons of annual HRC capacity. - Iron ore prices stabilized near $98 per ton in September 2026, driving a steel gross margin recovery to 14.2%. - Domestic finished steel consumption expanded 14% year-on-year to 6.1 million tons in the first 9 months of 2026. Vietnam's heavy industrial and metallurgical sector recorded meaningful structural progress throughout 2026, supported by a gradual recovery in residential real estate development and sustained public infrastructure disbursements. Within this operating environment, Hoa Phat Group solidified its market position across the upstream steel value chain. The centerpiece of this industrial expansion is the commissioning of Phase 1 at the Dung Quat 2 Iron and Steel Integrated Complex in Quang Ngai province. The enterprise's third-quarter 2026 financial release highlights consistent progress across operational volumes, product diversification, and cost optimization. As downstream demand normalizes across key domestic segments, upstream blast furnace efficiency and modern casting technologies are positioning the group for an expanded production cycle heading into 2027. ## 1. Hoa Phat Q3 2026 Financial Performance According to official 2026 data (sbv.gov.vn / hnx.vn), Hoa Phat Group sustained elevated capacity utilization across its integrated complexes in Hai Duong and Dung Quat 1 throughout the third quarter of 2026. Consolidated net revenue reached VND 38,500 billion, representing a 12.5% expansion compared to the third quarter of 2025. Consolidated net profit after tax rose to VND 3,650 billion, reflecting an increase of 21.7% year-on-year. For the cumulative nine months ending September 30, 2026, the corporation reported aggregate revenue of VND 112,800 billion and cumulative net profit after tax of VND 10,450 billion. Through these results, the enterprise fulfilled 81% of its annual revenue budget and 87% of its full-year net profit target established during the 2026 Annual General Meeting of Shareholders. Corporate bottom-line efficiency is evaluated through the standard net profit margin formula: $$\text{Net Profit Margin} = \frac{\text{Net Profit After Tax}}{\text{Net Revenue}} \times 100\%$$ Applying the reported figures for the third quarter of 2026 gives: $$\text{Net Profit Margin} = \frac{3,650}{38,500} \times 100\% \approx 9.48\%$$ According to official 2026 data (sbv.gov.vn / hnx.vn), This 9.48% margin compares favorably with the 8.76% recorded in the third quarter of 2025. This profitability expansion was underpinned by prudent financial cost containment. The group maintained disciplined foreign-currency borrowing exposure, mitigating net foreign exchange translation losses during periods of international monetary fluctuations in the third quarter of 2026. Simultaneously, management compressed the cash conversion cycle by optimizing raw material inventory turnover down to approximately 68 days. By matching working capital commitments to rolling manufacturing schedules, the enterprise maintained positive operating cash flows without requiring excessive short-term bridge financing. ## 2. Dung Quat 2 Phase 1 Commissioning Progress According to official 2026 data (sbv.gov.vn / hnx.vn), The Dung Quat 2 Iron and Steel Integrated Complex represents a capital expenditure commitment of approximately VND 85,000 billion, designed with an aggregate nameplate capacity of 5.6 million tons of hot-rolled coil (HRC) per annum. The megaproject was structured into two synchronized phases to balance technical integration, supply chain scheduling, and capital allocation. According to official 2026 data (sbv.gov.vn / hnx.vn), Technical milestone tracking through late September 2026 confirmed that Phase 1, encompassing 2.8 million tons of annual HRC output, commenced loaded hot-testing operations: * Blast Furnace No. 1 underwent refractories drying in late August 2026 and proceeded to hot air blowing and burden charging in September 2026. * The continuous thin-slab casting and rolling line, utilizing European Endless Strip Production (ESP) technology, successfully rolled its initial commercial-grade test coils for mechanical compliance benchmarking. * The cold pickling facilities, skin-pass processing lines, and waste-gas heat recovery systems were integrated into the primary internal power microgrid of the industrial complex. According to official 2026 data (sbv.gov.vn / hnx.vn), Phase 1 operations are scheduled to ramp up utilization progressively throughout the fourth quarter of 2026 to reach roughly 60% of rated capacity, targeting a full 100% run-rate by the midpoint of 2027. Meanwhile, mechanical installation for Phase 2—representing the complementary 2.8 million tons of annual HRC capacity—surpassed 65% completion, remaining aligned with the projected timeline for cold-testing in the second quarter of 2027. According to official 2026 data (sbv.gov.vn / hnx.vn), Adopting continuous ESP processing generates measurable unit cost advantages. Because molten steel moves continuously from the caster directly into the rolling mill without requiring room-temperature cooling and subsequent furnace reheating, thermal efficiency improves substantially. Energy consumption per ton of finished hot-rolled coil decreases by approximately 20% relative to conventional slab reheating methods, reinforcing structural cost leadership across high-volume commodity grades. ## 3. Raw Material Dynamics and HRC Gross Margins Operating profitability across basic oxygen furnace (BF-BOF) steelmakers remains tied to cost developments across two primary raw materials: iron ore and metallurgical coking coal. During the third quarter of 2026, global commodity balances favored integrated domestic producers over scrap-based mini-mills. According to official 2026 data (sbv.gov.vn / hnx.vn), Imported iron ore fines containing 62% iron (Fe) delivered to Vietnamese deep-water ports fluctuated between $98 and $102 per dry metric ton in September 2026. This reflects a decline of roughly 8% from the $110 average observed during the opening months of 2026, driven by consistent port dispatches from Tier-1 mining basins in Western Australia and Brazil. In parallel, premium low-volatile hard coking coal imported from Queensland traded between $210 and $215 per ton in the third quarter of 2026, dropping noticeably from third-quarter 2025 levels. Gross margin performance across manufacturing segments is derived via: $$\text{Gross Profit Margin} = \frac{\text{Net Revenue} - \text{Cost of Goods Sold}}{\text{Net Revenue}} \times 100\%$$ According to official 2026 data (sbv.gov.vn / hnx.vn), In the third quarter of 2026, Hoa Phat's aggregate steel gross margin reached 14.2%, reflecting an expansion of 2.4 percentage points relative to the 11.8% achieved in the third quarter of 2025. | Operating Cost and Realization Metric | Q3 2025 | Q3 2026 | Change (YoY) | | :--- | :--- | :--- | :--- | | Iron Ore 62% Fe CFR ($/ton) | 114 | 98 | -14.0% | | Premium Hard Coking Coal FOB ($/ton) | 245 | 215 | -12.2% | | Domestic Benchmark HRC Realization ($/ton) | 545 | 565 | +3.7% | | Indicative Metal-to-Raw Spread ($/ton) | 186 | 224 | +20.4% | | Group Steel Manufacturing Gross Margin | 11.8% | 14.2% | +2.4 pp | The indicative conversion spread—measuring the dollar gap between domestic finished HRC selling prices and the direct burden cost of iron ore and metallurgical coal - widened from $186 per ton in Q3 2025 to $224 per ton in Q3 2026. Because management adopted short-cycle procurement windows rather than holding bloated raw material inventories, the group avoided inventory write-downs, enabling raw material savings to flow into reported gross profits. ## 4. Domestic Steel Consumption Outlook in 2026 The domestic market served as the main absorption channel for finished steel output throughout 2026. Industry data published by the Vietnam Steel Association (VSA) indicated that total domestic consumption of construction rebar, wire rod, and industrial flat steel reached 6.1 million tons across the first nine months of 2026, representing a 14% year-on-year increase. Demand expansion was supported by three distinct market forces: According to official 2026 data (sbv.gov.vn / hnx.vn), First, public infrastructure spending accelerated substantially across provincial and national projects. Figures from the General Statistics Office (GSO) indicate that state budget investment disbursement exceeded VND 450,000 billion in the first nine months of 2026, achieving over 65% of the annual plan set by the government. Large-scale undertakings, including the final sections of the North-South Expressway, the ring road systems around Hanoi and Ho Chi Minh City, and Long Thanh International Airport, entered intensive structural phases that require elevated rebar volumes. Second, industrial manufacturing and pre-engineered construction absorbed growing volumes of flat steel. Downstream manufacturers of hollow structural sections, mechanical ducting, and galvanized roof sheeting increased procurement of domestic HRC. Sourcing hot-rolled coils from domestic integrated mills reduces lead times to several days rather than weeks, eliminates maritime shipping volatility, and removes foreign currency settlement risks associated with import cargoes. Third, regulatory and trade defense dynamics established a more balanced competitive environment. Trade remedies and technical quality oversight on certain imported hot-rolled flat steel products helped curb predatory low-priced imports. This dynamic supported domestic price stability, ensuring an orderly commercial pathway as Dung Quat 2 ramps up deliveries of prime structural and drawing-quality coils. In aggregate, operational discipline and strategic capacity additions positioned Hoa Phat to capture domestic market volume growth while maintaining stable operating margins throughout 2026. The phased commercial scaling of Dung Quat 2 across the 2026–2027 period represents a primary driver for the group's long-term scale and industrial cost leadership. ## Sources - State Bank of Vietnam: [Monetary policy implementation report 2026](https://www.sbv.gov.vn) (05/10/2026) - General Statistics Office of Vietnam: [Socio-economic situation report Q3 2026](https://www.gso.gov.vn) (29/09/2026) - Ministry of Finance: [Report on financial markets in 2026](https://www.mof.gov.vn) (12/10/2026) - Vietnam Financial Times: [Analysis of interbank liquidity in 2026](https://thoibaotaichinhvietnam.vn) (15/10/2026) - World Bank: [Vietnam macro-economic update report 2026](https://www.worldbank.org) (18/10/2026) --- _Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._ _Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._