The Hot Dipped Galvanized Coil (HDG) market demonstrated notable strength in February 2025, with significant price increases in the United States and moderate gains in European markets. This upward trajectory has been fuelled by a combination of trade restrictions, supply constraints, and strategic positioning by major steel producers amid shifting demand patterns.

Key Takeaways:

• U.S. HDG prices surged by 5% in both the third and final weeks of February
• German HDG prices remained stable in the third week before climbing 0.8% in the final week of February
• Market sentiment has turned bullish as producers push for higher prices across regions
• Supply constraints and impending tariffs are driving pre-emptive buying despite sluggish end-user demand
• Scrap costs and raw material prices continue to influence HDG production expenses and market dynamics

The U.S. HDG market experienced remarkable momentum throughout February, with prices climbing 5% in the 3^rd week and another 5% in the final week. U.S. Steel initiated this trend by raising flat-rolled steel prices by at least $50 per short ton, establishing new minimums for HDG products. Nucor followed suit, contributing to the market's upward pressure. These substantial increases reflect a strategic repositioning by domestic mills to reestablish the pricing spread between hot-rolled and tandem products. The significant price hikes have caused "sticker shock" among some buyers, potentially influencing future purchasing behaviour as the market adjusts to these elevated levels.

In Germany, the HDG market displayed more measured movement, with prices holding steady in the 3rd week of February before registering a 0.8% increase in the final week. This modest growth reflects the cautious approach of European buyers, who have been purchasing smaller volumes while partially accepting higher offers. Mills in Northern Europe are offering future deliveries at elevated prices, with some buyers willing to accommodate these rates. Market participants report that larger orders may be negotiable at more favourable terms, indicating some flexibility despite the overall upward trend.

As per ChemAnalyst, the HDG market outlook remains cautiously optimistic through Q2 2025, though sustainability depends heavily on genuine demand recovery rather than speculative purchasing. While short-term price increases are expected to continue, particularly in the U.S. market, the eventual stabilization will require improvements in end-user consumption from key sectors like construction and automotive. European HDG prices are forecasted to experience more moderate growth compared to their American counterparts, with potential for market correction if import availability improves or demand remains soft. Overall, market participants should prepare for continued volatility as the industry navigates these shifting dynamics and adjusts to new equilibrium price levels.