U.S. and European HDG Markets See Price Gains Despite Economic Hurdles

The Hot Dip Galvanized Coil (HDG) market is navigating through small fluctuations in Germany and the United States, reflecting broader economic shifts and industry-specific challenges. Both markets are grappling with unique sets of factors influencing HDG demand, supply, and pricing, painting a complex picture for this crucial steel product.

In the U.S., HDG prices have shown a modest uptick, with galvanized plain sheet increasing by 2.3% in early October, followed by a further 0.4% rise in the week ending October 11th. This contrasts with Germany, where HDG prices climbed by 1% in the initial week of October and an additional 0.6% the following week. These price movements come against a backdrop of mixed market signals and regional economic pressures affecting the HDG sector.

The U.S. HDG market is facing a confluence of factors. Nucor's price hikes have narrowed the gap with imports, while weak demand and cautious market sentiment persist. The manufacturing sector, a key consumer of HDG, remained stable at subdued levels in September, though positive signs emerged with improving new orders and falling input prices. However, the automotive industry, another significant HDG user, saw a 12.3% year-over-year drop in vehicle sales, impacted by inflation and tightening consumer budgets.

In Germany, the HDG landscape is equally complex. European steel producers, including HDG manufacturers, have raised prices amid rising costs, yet finalizing deals remains challenging. The country's manufacturing sector experienced its most significant contraction in a year during September, with steep declines in output, new orders, and employment. This downturn has directly impacted HDG demand, with constructors cutting purchasing activity, leading to improved delivery times but declining purchasing costs.

Supply dynamics for HDG are in flux in both regions. U.S. HDG production and capacity utilization have declined, with the week ending September 28th seeing a 3.6% decrease in production compared to the previous week. In Germany, ongoing issues like safeguarding duties and anti-dumping investigations continue to affect HDG import competitiveness, adding another layer of complexity to the market.

As per ChemAnalyst, the HDG prices are expected to increase for the coming weeks of October as both countries are trying to accelerate its own manufactured steel products in domestic market. In the U.S., declining interest rates and potential improvements in manufacturing activity could boost HDG demand in the coming months. For Germany, expectations of lower interest rates might stimulate end-user demand for HDG products, but ongoing challenges in key sectors like automotive continue to temper projections. The resolution of trade uncertainties, developments in raw material costs, and the performance of end-use industries will be crucial in shaping HDG's trajectory.