European HDG supply forecast bleak, some mills sold out for rest of year

European hot-dipped galvanized steel prices were heard higher in the week ending May 19, as the short supply squeeze gripped the European market with fewer buying options available.

Some mills were heard to be out of the market for the remainder of the year, though some were able to reserve some volume for their long-time customers for the fourth quarter and as late as first quarter 2022.

“I can tell customers which quantities we have in our forecast for them,” an European mill source said. “I can give this information, but without a price — customers know at least what he will be promised.”

A Benelux buyer source also said they were unable to fix volumes for their customers due to lack of offers from suppliers, and said it was increasingly difficult to get import offers.

The same source said they were a frequent buyer of Italian material but were not purchasing at this time because of higher transport costs to the Netherlands.

A German distributor was actively buying from Italian suppliers, with an HDG deal heard at Eur1,350/mt ex-works Italy on May 17.

Northern European HDG prices were heard to be around Eur1,200-1,250/mt, with few offers seen.

The same distribution source said some automotive producers had implemented short working times among their staff due to the ongoing semiconductor shortage, which could have an influence on mills.

“The automotives will call off less material if they don’t need it,” the source said.

In the Italian market, sources were certain of a prolonged bullish pricing period amid thin HDG supply.

“As long as production doesn’t rise or protectionism does not decrease, this situation will last in Europe,” an Italy-based trader said.

In recent weeks, several market participants have noticed a slowdown in automotive demand. A second Italy-based trader said this was not due to a lack of demand, but a result of raw material and semiconductor shortages in Europe.

“Automotive has not succeeded in restocking,” the trader said. “Meanwhile, household appliances and construction sector [demand] is going crazy.”

— Amanda Flint