Domestic producers AK Steel and Allegheny Technologies, Inc. are awaiting a decision by the European Commission on tariffs for grain-oriented electrical steel. According to Law 360, the provisional duties will likely be set this week and come in at 22% for the US producers.
That tariff would likely make US exports uncompetitive into European markets.
Meanwhile, US spot M3 prices fell 8% last month on the back of continued declining domestic surcharges. GOES prices seem to have bucked the recent rise in most metals markets (exceptions include stainless steel and rare earth metals, whereas steel held steady).
The domestic anti-dumping case has failed to provide the much- desired increase in GOES prices. Since many of the transformer and electrical power equipment manufacturers have global operations, many of them opted to modify their global supply chains to avoid potential domestic duties (which didn’t materialize anyway). Nonetheless, stacked and wound transformer core imports continue to grow:
With 24 new nuclear reactors planned in China, demand for high grade GOES continues to be high and that has led to price increases for Japanese materials. European electrical power equipment manufacturers have come into the market early to secure high-grade material regardless of the outcome of the European trade case, according to a recent TEX Report.
Demand Still Strong
This indicates to us that demand remains brisk for high-grade materials but the type of material supplied by the US domestic producers, a market in which more competition exists, may fare worse. What’s clear is that high-grade prices are on the rise but low-grade prices seem to be trading sideways.
The anti-dumping case will provide additional clues as to where domestic producers GOES’ prices will go.
What about the actual M3 GOES price this month? Click below.