A small 3% price bump in the monthly GOES M3 index doesn’t tell us a whole lot, however, it suggests that prices may have found a floor back in the November/December 2015 time frame.
Free Sample Report: Our February Metal Buying Outlook
Part of finding that floor may have come from good, old-fashioned supply and demand. Consider that the comments from Allegheny Technologies, Inc., Chairman, President and CEO Rich Harshman recently indicated that he would be taking “rightsizing actions” to return ATI’s flat products group to profitability as quickly as possible.
Furthermore, speaking of two recent closures he said, “The future restart of the Midland and GOES operations respectively will depend on future business conditions and ATI’s ability to earn an acceptable return on invested capital on products produced at these operations.”
This type of action, particularly the shutdown of the ATI GOES line, helps to bring some additional balance to the market. The rest of the steel industry will need to follow suit to support HRC prices, but that’s another story. AK Steel has attempted to achieve price increases but imports have kept domestic prices in check.
In addition, Tex Report wrote that Chinese mills will suspend commodity grain-oriented sheet lines. MetalMiner has since learned that the two mills are Baosteel and WISCO and have told customers that they would be cutting production. However, like other Chinese steel industry production cut announcements, the 2016 cuts actually refer to the “advertised” tonnage available as opposed to actual production cuts. Industry participants do not expect any shortage of M3 this year.
Meanwhile, the most recent import trade data shows a 19% decline in transformer part imports:
While wound cores held steady:
Exact GOES Coil Price This Month
US grain-oriented electrical steel (GOES) coil increased from $2,571 per metric ton to $2644 per mt.
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.