Grain-Oriented Electrical Steel Prices Dropping as Imports Spike

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If you’re an electrical steel buyer, here’s a good excuse to keep a better eye on future prices.

The Specialty Steel Industry of North America (SSINA) recently released a statement expressing “concern” over growing imports of grain-oriented electrical steel (GOES) in 2012.

David Hartquist, an international trade lawyer and a partner at Kelley Drye & Warren LLP who represents SSINA, cited a large percentage increase for grain-oriented electrical steel so far this year.

“Official U.S. government statistics through July, 2012, plus preliminary import data for August and September, show imports from four key exporters — Japan, Korea, Poland and Russia — up 32 percent over the same period last year,” Hartquist said.

This trend jives with what MetalMiner has been seeing and hearing in the GOES market — will new anti-dumping cases bust open? And what does it mean for prices?

“The average unit values shown in the statistics are quite low, indicating possible dumping and below-cost sales in the United States,” Hartquist continued. “Domestic producers are assessing the situation to determine whether U.S. trade laws are being violated.”

A key component in manufacturing electrical power transformers, grain-oriented electrical steel imports have surged before. Back in May 2012, Japan, Korea and Poland were all on SSINA’s watch list as the primary culprits, in addition to the Czech Republic, according to SSINA release. A 2011 analysis showed that Japanese electrical steel producers were indeed guilty of dumping the metal.

“Annualizing March data for full year 2012 would result in the following: a 38 percent increase in imports over 2011 by value, and a similar 38 percent increase over 2011 in quantity,” said Hartquist back in May. “If this trend continues through 2012, it would represent a 340 percent increase in tons over 2009.”

These trends are consistent with grain-oriented electrical steel import data available to the MetalMiner IndX℠. Of course, these imports are drawing down prices.

Want current grain-oriented electrical steel and input prices?

According to MetalMiner IndX℠ data, grain-oriented electrical steel coil prices and electrical steel coil surcharges per metric ton have both been consistently declining over the past half-year, and the GOES coil price per ton as of September 2012 is the lowest it’s been since June 2006.

The electrical steel price outlook remains dour. Quoting from MetalMiner’s last monthly grain-oriented electrical steel price report, published Sept. 25: “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 30 days prior to Sept. 25, US HRC prices peaked during the week of Sept. 4 and began falling Sept. 10, according to MetalMiner IndX℠ data. (HRC is a key GOES input.) “We suspect steel producers will tighten capacity to reduce slack in the market and provide price support to HRC,” Reisman added at the time of the report.

Image source: energy.siemens.com

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