European HDG stable; automotive demand improves

The European HDG market was relatively stable Aug. 12 with further improvements seen in automotive demand, sources told S&P Global Platts.

The Platts TSI HDG index was assessed at Eur520/mt ex-works Ruhr Aug. 12, unchanged week on week.

In southern Europe, HDG rose Eur5 on the week and was assessed at Eur493/mt EXW S Europe, its highest mark since May 20.

A German service center source confirmed recovering demand from automotive original equipment manufacturers and truck manufacturers.

“There is some restocking in the market as from March to June [during the] lockdowns there was inventory depletion, so they must restock as inventories are at a low level,” he said. After three months of complete closure, truck manufacturers in particular are now enjoying fuller order books that will support activity for the third quarter, the source said.

“Automotive order intake is better but not yet at preCOVID-19 levels,” he said adding that recent price gains achieved in the hot-rolled coils market will lift galvanized prices in the coming weeks.

A Benelux-based service center source said the outlook for HDG was unclear in the short term. While there was now reduced import volumes available in the European market, this will be offset by the return of Liberty to production, the source said, adding: “for HDG it’s unclear on what will happen.”

A Benelux-based trader said construction demand continued to be strong in Northwest Europe.

“Automotive trend is a little better, slowly of course, not the level of demand we want, but it’s slowly starting again and construction doing well in Benelux — a lot [of investment] going into real estate,” he said.

With the majority of market participants in southern Europe on holiday, the current market level was unclear, said an Italy-based rolling mill source.

An Italy-based distribution source said there was increased pressure on cold-rolled and hot-dipped galvanized material due to the sluggish return of automotive demand, but added that it was felt “mainly on galvanized products.”

— Len Griffin, Amanda Flint