The Hot Dip Galvanized Plain Sheet (HDG) market in Germany has demonstrated remarkable price stability through the week ending January 24, 2025, despite mounting pressures from broader European steel industry challenges. This steadiness comes as market participants navigate through complex dynamics of weak construction demand and evolving trade policies.

Key Takeaways

• HDG prices remain unchanged in Germany for week ending January 24
• Construction sector demand continues to be subdued
• Market participants await spring construction revival
• EU safeguard measures under review
• Energy costs remain a significant concern for producers

The stability in HDG prices reflects a delicate balance between opposing market forces. While producers face increasing pressure from elevated energy costs, weak demand from the construction sector has prevented any upward price momentum. The market's resilience is particularly noteworthy given the broader challenges facing the European steel industry, including concerns about global overcapacity and declining regional demand.

In Central Europe, particularly Germany, market participants report that while current demand remains subdued, there are emerging signs of potential improvement. Dutch sources indicate possibilities of increased construction activity in the spring, supported by new government-commissioned projects that prioritize construction over environmental concerns. This shift in focus could potentially stimulate HDG demand in the coming months.

The European steel landscape is currently experiencing significant regulatory uncertainty. Eurofer's recent proposal to the European Commission for a 50% reduction in import quotas on flat steel products, including HDG, has created additional market tension. The proposal, submitted on January 10 and made public on January 22, has particularly concerned importers, especially given the abbreviated comment period.

Import competition remains limited, with overseas offers failing to gain significant traction due to ongoing uncertainties surrounding the EU's safeguard review. Market participants report that while import offers exist, interest remains low as buyers await clarity on future trade policies. This situation has helped maintain price stability of HDG in the domestic market, despite weak underlying demand.

Energy costs continue to be a major concern for HDG producers, with current prices significantly higher compared to the previous year. This cost pressure has forced manufacturers to maintain price levels despite weak demand, creating a challenging operating environment for both producers and buyers.

ChemAnalyst indicate that HDG price movements over the next few months will be influenced by several key factors, including a recovery in construction sector activity, the implementation of proposed trade measures, fluctuations in energy costs, and changes in Chinese export policies alongside global capacity utilization. While the short-term outlook for HDG appears cautiously stable, market participants recognize the potential challenges ahead. The International Steel Producers and Exporters Association's pessimistic stance on the European steel market may indirectly affect the HDG sector, especially if construction activity remains weak.