Price Drops While High-Grade GOES Faces a Supply Shortage, Anti-Dumping Duties

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As reported last month, the European Commission had not released the provisional dumping margins on US GOES producers along with producers from Russia, China, Japan and Korea.

GOES_Chart_June_2015_FNL

However, those provisional duties have since been released, ranging from 21.6% to 35.9%.

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Eurofer, the European Steel Association, subsequently released a second press release on May 28, defending the European steel producers against a backlash of criticism from manufacturers and buying organizations. And whether or not you “buy” the Eurofer arguments supporting the claims, we have direct evidence here in the US of what happens when buying organizations face higher prices – they adjust their supply chains!

Manufacturers Moving

In the US case, these electrical power equipment manufacturers moved their operations to more favorable manufacturing locations (e.g. Mexico and Canada). Check out the latest import data from Zepol in terms of the growth of that market:

GOES_chart_060115

Source: Zepol

Regardless, trade cases remain the headline story for grain-oriented electrical steel.

New Anti-Dumping Allegations

Six US steel producers filed an anti-dumping case against China and other countries for galvanized, aluminized and galvalume products as well as pre-painted steels. And though this case does not include GOES, the flood of steel imports has everybody screaming anti-dumping.

Nobody doubts the world faces a glut of steel. Of course, the grain-oriented electrical steel market behaves differently from other steel markets, where some segments of the GOES market remain in an over-supply situation and the high performance end of the market faces a global supply squeeze.

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And therein lies the rub – domestic M3 prices have dropped from last month.

The monthly GOES M3 MMI® registered a value of 171 in June, a decrease of 6% from 186 in May. (*Correction: the initial May value was reported to be 182; the correct value is 186.)

After dropping the previous month, US grain-oriented electrical steel (GOES) prices rose 2.1% to $2,571 per metric ton.

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The GOES MMI® collects and weights the M3 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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