Grain-Oriented Electrical Steel (GOES) Price Index Drops 12%

by on

Grain-oriented electrical steel (GOES) prices dropped by 12 percent for the month of September — breaking a two-month upward price line — putting September’s GOES MMI® value at 228.

GOES coil prices dropped 12 percent on MetalMiner IndX℠ due to falling HRC prices, lower surcharges and lower global prices, albeit with higher trading volumes. Comparatively, August’s GOES value stood at 259.

GOES price trend 2012

Rumor Preceded Reality

“The rumor mill had suggested prices would fall for grain-oriented electrical steel somewhere in the range of 10 to 30 percent,” said Lisa Reisman, managing editor of MetalMiner. “Our MetalMiner IndX℠ reading suggests that drop has fallen in the low end of the range, but we don’t know if prices will still fall further.”

Over the last 30 days, US HRC prices peaked during the week of Sept. 4 and began falling Sept. 10, according to MetalMiner IndX℠ data. “We suspect steel producers will tighten capacity to reduce slack in the market and provide price support to HRC,” Reisman added.

In a Sept. 14 research note, Reed Construction Data reported, “Nonresidential construction spending fell 0.7% from June to $298.8 billion, while year-to-date nonresidential construction spending was up 8.4% from the same period for 2011. June numbers were revised down $1.3 billion. As a result, instead of rising 0.3% as was originally reported, June spending declined 0.1%.”

Driving Factors of GOES Price

Adding to the downbeat news, AK Steel, one of two primary producers of GOES in the US told Wall Street that it expected a 7 percent lower price-per-ton average for its products (which include a broad range of stainless steels and others) for the third quarter of this year.

The company cited three factors leading to that trend:

“Lower spot market prices for carbon steel products, due primarily to a decline in global economic and business conditions; reduced raw material surcharges, due to lower raw material costs; and a lower percentage of value-added products in the total mix of shipments, due principally to market seasonality resulting from factors such as summer plant closures in the automotive industry.”

Check back the same time next month for October’s GOES MMI® report.

Comment (1)

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.