Challenges and Responses in the Galvanized Steel Foreign Trade Market under the Complex International Situation
I. Introduction
Under the current unpredictable international situation, the galvanized steel foreign trade market is facing unprecedented challenges and opportunities. Frequent geopolitical conflicts, the rise of trade protectionism, and drastic fluctuations in raw material prices are intertwined, profoundly impacting the global landscape of the galvanized steel industry. For industry practitioners, accurately understanding the situation and formulating effective strategies are crucial for seeking development in this complex environment.
II. The Impact of Geopolitical Conflicts on Galvanized Steel Foreign Trade
2.1 The Sustained Impact of the Russia-Ukraine Conflict on the European Market
The Russia-Ukraine conflict has entered a stalemate, and its impact on the European galvanized steel market continues. Europe has imposed sanctions on Russian steel products. As a major global steel producer, Russia’s galvanized steel exports to Europe have significantly declined. Statistics show that since the outbreak of the conflict, Russia’s galvanized steel exports to Europe have decreased by approximately 40% compared to pre-war levels. This has led to a tight supply in the European market and drastic price fluctuations.
To meet demand, some European enterprises have had to seek new sources of supply. Galvanized steel products from countries such as China and Turkey have increased their market share in Europe. For example, in 2024, the galvanized steel exports of a large Chinese steel enterprise to Europe increased by 25% year-on-year. However, the European economy has been dragged down by the conflict, and the growth of infrastructure construction and industrial production has slowed down. The demand for galvanized steel has shown weak growth, and the order volume of some enterprises has declined.
2.2 The Israel-Palestine Conflict Disrupts Logistics and Market Demand in the Middle East
The escalation of the Israel-Palestine conflict has had a direct and severe impact on the galvanized steel market in the Middle East. The Middle East was originally an important consumer market for galvanized steel. The conflict has caused a large number of local infrastructure construction projects to be suspended, and new investment plans have been put on hold. According to statistics, in the second half of 2024, the demand for galvanized steel in the Middle East decreased by approximately 30% compared to the first half of the year.
The conflict has also severely disrupted logistics and transportation in the Middle East. The shipping routes in the Red Sea have been blocked, resulting in extended transportation times and a significant increase in costs. The transportation time of a cargo ship from China to Israel has been extended from the original 20 days to 35 days, and the transportation cost has increased by about 50%. This has discouraged many enterprises from exporting to the region, further exacerbating the tight supply situation of galvanized steel in the Middle East market.
III. Trade Protectionism Aggravates Industry Dilemmas
3.1 The Sustained Impact of US Tariff Policies
Under Trump’s “2.0” policy, the United States maintains high import tariffs on steel products, with tariffs on some galvanized steel products as high as 25%. This policy has severely weakened the price competitiveness of galvanized steel products from countries such as China in the US market. Take a Chinese galvanized steel enterprise as an example. After its products are exported to the United States, the price is 15% – 20% higher than that of similar local products, resulting in a significant reduction in order volume. In 2024, its export value to the United States decreased by 40% compared to 2023.
The United States also frequently initiates anti-dumping and countervailing investigations, setting numerous obstacles for Chinese galvanized steel enterprises. In 2024, the United States launched several “double – anti” investigations on Chinese galvanized steel products, involving hundreds of millions of dollars. Some enterprises were imposed high anti-dumping and countervailing duties, further squeezing profit margins and even forcing them to withdraw from the US market.
3.2 The Continuous Emergence of Trade Protection Measures in Other Countries
In addition to the United States, countries and regions such as the European Union, India, and Vietnam have also introduced trade protection measures one after another. The European Union has set strict technical standards and environmental protection requirements for imported galvanized steel products. India imposes high import tariffs on some galvanized steel products, and Vietnam initiates anti-dumping investigations on Chinese galvanized steel products.
These trade protection measures have made the competitive environment faced by Chinese galvanized steel products in the international market increasingly harsh, and the difficulty of export has been continuously increasing. According to statistics from the China Iron and Steel Association, in 2024, the export volume of Chinese galvanized steel products decreased by 18% year-on-year, and the export value decreased by 22%.
IV. Fluctuations in Raw Material Prices Affect Costs and Profits
4.1 Drastic Fluctuations in the Prices of Zinc and Other Raw Materials
The price of zinc, the main raw material for galvanized steel production, has fluctuated significantly in recent years. At the beginning of 2023, the price of zinc was around $2,000 per ton. By mid-2024, it once rose to $3,000 per ton, and then fell back to around $2,500 per ton by the end of 2024. The sharp fluctuations in zinc prices have brought huge cost pressures to galvanized steel production enterprises.
When zinc prices rise, the production costs of enterprises increase significantly. If the cost cannot be passed on to product prices, the profit margin will be severely compressed. For example, during the period of rising zinc prices, the production cost of a medium-sized galvanized steel production enterprise increased by 20%, but due to fierce market competition, the product price only increased by 10%, resulting in a 50% decline in the enterprise’s profit.
4.2 The Price Transmission of Related Raw Materials Such as Iron Ore
As an important raw material for steel production, the price fluctuations of iron ore also indirectly affect the galvanized steel industry. Changes in iron ore prices will affect the production cost of steel, and thus influence the price and profit of galvanized steel. When iron ore prices rise, steel prices also increase. Galvanized steel production enterprises face increased costs when purchasing steel. At the same time, the market’s acceptance of galvanized steel prices is also affected. Enterprises are faced with the dual challenges of rising costs and changing market demand.
V. Enterprise Response Strategies and Industry Development Trends
5.1 Enterprise Response Strategies
Facing the complex international situation, galvanized steel enterprises need to adopt diversified strategies to meet challenges. On the one hand, they should strengthen technological innovation, increase the added value of products, and develop high-performance galvanized steel products with high corrosion resistance, high strength, etc., to meet the needs of the high-end market and enhance product price competitiveness. For example, an enterprise has developed a new nano-galvanizing technology, which has increased the corrosion resistance of products by 50%, and the product price is 30% higher than that of ordinary galvanized steel, receiving a good response in the international market.
On the other hand, actively explore emerging markets and reduce dependence on traditional European and American markets. The countries along the “Belt and Road” have strong demand for infrastructure construction, providing a broad market space for the galvanized steel industry. Enterprises should strengthen cooperation with these countries, expand product exports by participating in local project construction, establishing marketing networks, etc. At the same time, enterprises with conditions can consider investing in overseas factories, taking advantage of local resources and policy advantages to reduce production costs and avoid trade barriers.
5.2 Industry Development Trends
In the long run, green environmental protection will become an important development trend of the galvanized steel industry. With the increasing global attention to environmental protection, the environmental protection standards for steel products in various countries are becoming increasingly strict. Developing green galvanizing processes and reducing energy consumption and pollutant emissions during the production process will be the key to the future development of enterprises. For example, some enterprises have begun to adopt environmentally friendly technologies such as chromium-free passivation to reduce harm to the environment and enhance the enterprise’s social image and market competitiveness.
Digital transformation will also reshape the pattern of the galvanized steel industry. Through digital technology, enterprises can achieve precise control of the production process, efficient management of the supply chain, and rapid response to market demand. Use big data to analyze market trends and optimize product structure; use Internet of Things technology to achieve remote monitoring and intelligent maintenance of equipment and improve production efficiency. Digital transformation will help enterprises reduce costs and increase efficiency in the complex market environment and enhance their core competitiveness.
VI. Conclusion
Under the current international situation, although the galvanized steel foreign trade market faces many challenges, it also harbors new opportunities. Geopolitical conflicts, trade protectionism, and fluctuations in raw material prices bring uncertainties. However, through technological innovation, market expansion, and green development, enterprises can find breakthroughs in difficult situations. The industry should conform to the trends of green environmental protection and digital transformation, actively adjust strategic layouts, and enhance the ability to respond to risks. Only in this way can the galvanized steel foreign trade industry achieve sustainable development in the complex and changing international environment and occupy a place in global market competition.
