Vietnam Officially Joins Global 'Mother of Industry' Elite as Indonesia Trails Behind

Jakarta, CNBC Indonesia – Vietnam, a country that two decades ago relied on imported billets to meet domestic construction steel needs, has now officially entered the top 10 global steel producers. The World Steel Association ranked Vietnam 10th globally in April 2026 after crude steel production reached 2.1 million tonnes, a 4% increase compared to the same period last year. This growth propelled Vietnam past Italy in the global steel producer rankings. In the first four months of 2026, Vietnam’s crude steel production totalled 8.5 million tonnes, an 8.4% year-on-year rise. Within Southeast Asia, Vietnam’s position is now virtually unassailable. Vietnam has now surpassed Indonesia. Indonesia’s annual steel production is estimated at around 19 million tonnes, or an average of 1.58 million tonnes per month. Vietnam’s steel industry leap stemmed from long-term structural changes since the early 2000s, when domestic mills relied on imported semi-finished materials to produce construction steel. After 2010, the industry shifted aggressively, building a more comprehensive production chain from upstream to downstream while expanding steel products into manufacturing, shipbuilding, energy projects, and defence. The most prominent name in this expansion is Hoa Phat Group. The integrated Hoa Phat Dung Quat complex has become the backbone of Vietnam’s steel industrialisation. The plant produces engineering steel, welding wire, spring steel, crane steel, and rail steel for high-speed rail projects. These products have long been associated with the steel industries of developed nations such as Japan, South Korea, and China. Vietnam’s production capacity has grown rapidly in recent years. Crude steel output reached 20 million tonnes in 2023, jumping to 24.6 million tonnes last year. This represents a 23% increase over two years – far outpacing traditional steel producers whose output has stagnated due to weak global demand and energy transition pressures. Hoa Phat alone produced around 11 million tonnes of crude steel in 2025, accounting for 44.7% of Vietnam’s national output. This year, the company aims for over 14 million tonnes. Hoa Phat’s significant capacity expansion has bolstered Vietnam’s competitive pricing in regional markets. Vietnam’s momentum has also been boosted by global geopolitical shifts. Iran, previously in the top 10 steel producers, dropped to 12th after its major facilities were impacted by Israeli attacks. Iranian steel production in April was just 1.8 million tonnes. Disruptions in Middle Eastern supply have created opportunities for Vietnam to expand its export market share, particularly in Asia. Domestic demand in Vietnam remains strong. National steel consumption reached 24.1 million tonnes in 2025, a 12.9% year-on-year increase. This demand stems from infrastructure development, industrial zones, energy projects, and manufacturing expansion. Vietnam’s government has aggressively attracted global industrial investments in recent years, particularly as companies relocate production from China. This has had a ripple effect on the steel industry. As electronics, automotive, construction, and manufacturing sectors grow, steel demand surges. Vietnam has expanded production capacity to ensure domestic supply chains are not reliant on imports. The Vietnam Steel Association forecasts the national steel industry to grow 8-10% throughout 2026. Finished steel production is projected to reach 33-34.5 million tonnes this year, with domestic demand expected to approach 26 million tonnes. Vietnam’s shift is a significant story for Southeast Asia. The region has long been known as a steel consumer rather than a global production hub. Now, Vietnam is emerging as a new heavy industry base in the area. Steel is vital to human life. Dubbed the ‘Mother of Industry’, it plays a fundamental role in the development of various industrial sectors. This term arises because steel is the primary raw material and foundation of infrastructure for almost all modern industries. Reasons why steel is dubbed the ‘Mother of Industry’: 1. Used across virtually all industries Steel is a critical material in: Construction (buildings, bridges, roads) Automotive (vehicle frames) Shipbuilding and aviation Machinery and heavy equipment Energy (pipelines, power plants) Railway infrastructure 2. Backbone of the industrial revolution Since the Industrial Revolution, steel replaced iron as the primary material due to its strength, flexibility, and durability. Mass production of steel (e.g., via the Bessemer process) drove massive industrial expansion in Europe and America. 3. Economic health indicator Steel production and consumption are often used as indicators of a nation’s economic activity. Countries with strong steel industries typically have thriving manufacturing and construction sectors. 4. Foundation for infrastructure development Without steel, there would be no skyscrapers, modern ports, high-speed rail, or major bridges. National physical development heavily depends on steel availability. 5. Supports downstream industries The steel industry is the upstream source for many downstream sectors, including automotive, shipbuilding, agriculture (tools and machinery), and household goods.