The U.S. Department of Commerce. qingwa/Adobe Stock
The GOES M3 spot price index fell by 4% in October while no action has been taken on the Section 232 steel import investigation.
China has gone on the offensive, specifically calling foul on the U.S.’s decision not to grant China MES (market economy status). This and the Section 232 investigations have real implications for GOES markets and specifically the sole domestic producer AK Steel.
AK Steel missed its most recent earnings estimates, blaming lower automotive demand and shipments, lower average sales prices during Q3 and rising GOES imports, according to Market Realist.
But AK also cited higher LIFO charges and rising raw material costs.
According to AK Steel CEO Roger Newport in the company’s most recent earnings call Oct. 30, “Yet as the only steel manufacturer Grain Oriented Electrical Steel in United States, we’re battling some of the highest import levels in years. Imports of Grain Oriented Electrical Steel or GOES have increased by more than 260% year-over-year and these imports are coming primarily from South Korea, China and Japan.” He added imports had flooded the market in anticipation of the Section 232 process.
In reality, as reported by MetalMiner previously, the import surge has come largely from Japan which supplies the U.S. with grades of GOES not currently produced by AK Steel. Moreover, for the past two years, it’s hard to see an import surge from either Korea or China.
Meanwhile, from a demand perspective, ABB has shifted its manufacturing footprint by shuttering power-transforming production in St. Louis and investing instead in its South Boston and Crystal Springs locations.
Exact GOES Coil Price This Month