GOES Volume Declines For Domestic Producers Have Begun

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The transformer industry appears to have moved into Plan-B mode, as we previously reported.

This means US-based manufacturers of wound or stacked cores have begun moving operations outside of the US to Mexico or Canada to avoid countervailing and anti-dumping duties sure to go into effect later this year (after the Department of Commerce International Trade Administration rules on the claims brought by domestic producers AK Steel and Allegheny Technologies).

In the meantime, MetalMiner‘s monthly GOES MMI® registered a value of 215 in April, a decrease of 0.5 percent from 216 in March:

GOES April 2014

Compare with last month’s trends – here’s our free March MMI® Report.

Traders believe volumes for GOES won’t begin to decline for AK Steel and ATI until at least May. MetalMiner has learned of several AK Steel customers that will switch production to Mexico and/or Canada and will no longer purchase steel from AK, as we previously predicted.

Core makers that require high-performing material – effectively shut out of the US market due to the trade case – will simply access that material elsewhere. Other US-based core manufacturers have begun to the feel the pain and some have announced plant closures.

Although a flurry of activity involving the trade case has made its way through the ITA this past month, since our last post of March 7, 2014, no decisions of significance have occurred. A Preliminary Determination will occur on May 2, 2014, with final dumping rates coming out in September 2014.

Though others have reported price increases in the $100-200 range for higher grades of GOES, our own MetalMiner IndX℠ price fell slightly due to slightly declining US surcharges and steady import price levels. The MetalMiner IndX℠ reflects spot market prices and not contract values.

MetalMiner will cover the May 2 Preliminary Determination findings as soon as possible.

What This Means for Metal Buyers

Metal buying organizations that rely upon materials with low core loss will likely need to move operations to nearby NAFTA countries to avail themselves of higher-performing GOES and remaining core producers that require high-grade materials will need to consider alternative sourcing options.

At $2,964 per short ton, US grain-oriented electrical steel (GOES) coil was down 0.6 percent.

* Get the complete prices every day on the MetalMiner IndX℠

Compare with last month’s trends – here’s our free March MMI® Report.

The GOES MMI® collects and weights 1 global grain-oriented electrical steel price point to provide a unique view into price trends over a 30-day period. For more information on the GOES MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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