European Hot Dipped Galvanized Plate Prices are Plummeting
- 26-Aug-2022 4:55 PM
- Journalist: Francis Stokes
Moscow: In Europe, Hot-Dipped Galvanised (HDG) plate prices are falling during the week ending August 26th by roughly 4%, as steel manufacturers struggle to fill order books. Furthermore, buyers cited that mills are willing to offer discounts if they have received firm bids. Demand from distributors has been low in Europe, as buyers have stockpiled sufficient inventories and avoided new bookings in the bearish market. Furthermore, spot buyers are concerned that destocking has been slower than the expected rate; they prefer to wait and see until the second half of September, when both price trends and demand expectations should have stabilized.
Due to ongoing supply issues and the unfavorable global economic situation, the automotive segment is unlikely to recover significantly in Q3 2022, contrary to earlier expectations. Demand is currently pessimistic, and buyers have plenty of inventory. According to our sources, the automotive industry's outlook is cautiously optimistic, and demand should improve. Hot-Dipped Galvanised mills are desperate to sell their material and are willing to go below cost in some cases to make a sale.
After summer maintenance, Italian Hot-Dipped Galvanised manufacturers are not yet resuming production. Rising energy and other costs, coupled with lower finished steel prices, would need European steelmakers to take action. According to our sources, the mills must reduce output and reconsider surcharges. Some manufacturers have attempted to implement an energy surcharge for hot-dipped galvanized plates, and others are considering such measures in light of Europe's sharp rise in energy prices. Additionally, mills needed to review extras for coating due to the high cost of zinc. Market participants believed that increasing surcharges would be difficult while Europe was in a downtrend.
ChemAnalyst anticipates that "Hot-Dipped Galvanized prices are expected to fall further in the coming weeks as mills cut costs but fail to stimulate increased market activity. As long as demand remains the main issue, the mills will have to reduce production even further. Some market participants have been more optimistic about Hot-Dipped Galvanised demand from automakers, but steelmakers have continued to cut spot prices. "