MetalMiner‘s monthly GOES MMI® fell three points from 212 to 209, down 1.4%, and came in line with industry feedback that grain-oriented electrical steel prices have remained flat.
However, nobody should assume a flat price means little market activity.
In fact, GOES markets have heated up – but not the way domestic GOES producers AK Steel and Allegheny Ludlum would like them to. In fact, MetalMiner continues to hear of enormous growth in imports of finished cores coming into the United States.
Finished cores coming to the US mean that NAFTA countries, among others, can source GOES material globally, and not pay anti-dumping duties, as well as manufacture cores outside the US (though we understand AK Steel has increased M3 prices into Mexico).
Certainly, core imports increased from February to March, though clearly the volume appears “in range” with volumes from prior months. Nevertheless, this remains a key activity monitor in understanding where the US GOES and transformer market will go.
Meanwhile, as we suspected would happen, the evidence has started to come in – imports of GOES material have declined:
Zepol reports that GOES imports fell 37% from February to March. We expect these numbers to continue to decline.
Globally, producers have also raised prices for materials moving into Mexico, and that comes as no surprise as demand has shifted toward Mexico and away from the US. Meanwhile, though our monthly index has fallen just slightly, some domestic buying organizations have noted a slightly rising price for spot purchases.
Another factor affecting GOES markets involves product substitutes, such as amorphous material. Some buying organizations have shifted from using M4-M6 materials to alternatives. Meanwhile, tougher Department of Energy (DOE) standards that go into effect in 2016 will continue to create new demand for amorphous materials, certain to displace domestic GOES consumption. In addition, new amorphous producers will be entering the US market to compete with companies like Metglas.
Meanwhile, other GOES producers such as Posco – who received a much lower anti-dumping duty – have a big advantage as an alternative supplier to the two primary domestic producers.
What This Means for Buyers
We speculated months ago that AK Steel and Allegheny Technologies may have killed the golden goose. Some predict that the GOES market will largely have dried up by 2016. MetalMiner will continue to closely monitor imports of both finished cores and GOES – that will help tell the story.
And where did the GOES coil price end up?
With a 1.1 percent decline, US grain-oriented electrical steel (GOES) coil closed the month at $2,890 per metric ton.
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.