For the Quarter Ending December 2022
In the fourth quarter of 2022, Electrical Steel prices fell in the US market due to limited downstream demand from the steel and alloy segments and logistical concerns. Shippers loaded low weight on a barge in October because the Mississippi River's water level was low. Steel mill closures, limited production and maintenance, and slow replenishment all impacted demand. Furthermore, due to lower demand and less supply chain congestion, freight rates peaked during the quarter and began normalizing. Market participants reported little activity in the spot market as the holiday season approached. Premium level declines slowed in December, with reports of increased consumer inquiries - through the uncertain economic outlook for the first quarter remains a source of concern. A winter storm moving through Western New York also hampered logistics. The storm's aftermath and the disrupted supply chain resulted in limited downstream demand. In December, the price stabilized, but no one was rushing to buy from US mills rather than imports. Electrical Steel (M15-C5) Coil prices for Ex Tijuana and FOB San Diego settled at USD 5127/MT and USD 5193/MT, respectively.
Electrical Steel prices increased in the Chinese market in the fourth quarter of 2022, despite fluctuating raw material costs and COVID control and prevention measures. The social inventory of silicon metal in Huangpu Port, Kunming City, and Tianjin Port fell in October. Manufacturers had limited spot resources and were hesitant to sell at a low price. The pandemic has continued to disrupt the production of local silicon companies. Concurrently, the dry season in Sichuan and Yunnan has raised concerns about rising costs and production cuts in the fourth quarter. As overseas customers aggressively bargained down prices and the RMB appreciated against the US dollar, export orders were light in the overseas market. As downstream producers placed orders based on rigid demand, market trading improved slightly. As the pandemic control in Guangzhou eased in December, the shipment flow through Huangpu Port returned to normal levels. Some Dehong businesses ceased operations in late December 2022, while others cut back during the Chinese New Year. As a result, the price of Electrical Steel (50 WW 800) Coil for Ex. Shanghai was settled at USD 846/MT.
Electrical steel prices rose in the European market in Q4 2022, owing to the strong support from the cost side (semicoke, electricity, and transportation costs increased). Despite a decrease in supply and a shortage of inventory on the supply side in October, enterprises in the production areas resumed production and intake. Some buyers needed to restock, but they preferred to wait for the price to fall to its lowest point before replenishing for the first quarter of 2023. Electrical steel prices in Europe remained under pressure in November due to low demand and an oversupply of imported products. Manufacturers claimed that big buyers had left the market after booking needed volumes in mid-Q4 and that the market was slowing due to the approaching Christmas holidays. However, Electrical Steel prices surged in the last few weeks of December. The mills' bullish outlook was bolstered by several factors, including higher demand in December, expected to rebound further in mid-January; higher energy costs that steelmakers must cover; a lack of competitive import offers; and the effects of steelmakers' 2022 production cuts. As a result, Electrical Steel (50 WW 800) coil prices for Ex. Ruhr (Germany) settled at USD 2283/MT.
For the Quarter Ending September 2022
In North America, Electrical Steel prices witnessed a rising trend in the third quarter of 2022, owing to the robust demand from the downstream sectors amidst rising shortages. Service centers continue to postpone stocking purchases, with any additional tonnes purchased only to meet demand. Companies have begun contract negotiations for 2023, with at least one source reporting a 4% price decrease for value-add tonnes. According to market participants, electrical steel prices in the United States have risen since July. Because consistent Russian deliveries are expected, the US and India purchased large quantities of ferrosilicon from Russia, but these cargoes are still on their way and have not yet arrived at their warehouses. Furthermore, because the amount of silicon imported from China is significant, the United States has expanded its import sources to include Canada, Brazil, Venezuela, Russia, and others. As a result, Electrical Steel (M15-C5) Coil prices for FOB San Diego (USA) settled at USD 9566/MT.
In the Asian market, Electrical Steel prices witnessed a declining trend in the third quarter of 2022 amidst the restriction of power supply. According to market participants, manufacturers in Sichuan have halted production, and shipment in Xinjiang has become a significant issue due to the outbreak of COVID-19. Electrical Steel prices fell in the Chinese market due to a weak demand outlook and increased domestic production activity despite increasing import offers. Due to high temperatures and monsoon rain in Southeast Asia, seasonal demand is weak, and steel offtake is low in the summer. Following the rapid and significant decline in supply, inventories also demonstrated a trend of rapid depletion. In terms of demand, firms were still in a downturn. So far, no significant progress has been made. High costs, low demand, and shrinking margins make life difficult for Chinese steel mills. As a result, Electrical Steel (50 WW 800) Coil prices for Ex. Shanghai (China) settled at USD 980/MT.
During the third quarter of 2022, Electrical Steel prices witnessed an unprecedented surge amid a subdued demand outlook and seasonal mill closures. Earlier in the quarter, market players cited that Steel manufacturers have started raising offers on surging costs, though it was unclear if the market could absorb that. According to market participants, several silicon-producing firms have scheduled outages in July due to rising energy and fuel costs. This shutdown, however, has resulted in severe shortages in the domestic market. Because of the low demand, Electrical Steel prices fell. Furthermore, supply chain disruptions and inflationary pressures persist, despite economic headwinds. Price increases had accelerated by the end of the quarter due to increased demand from European consumers and a severe shortage of available volumes. Malaysian plants, which account for up to 30% of regional consumption and more than half of imports, are idle due to the country's severe COVID-19 outbreak. Thus, Electrical Steel (50 WW 800) Coil prices for Ex. Ruhr (Germany) settled at USD 2210/MT.
For the Quarter Ending June 2022
During the second quarter of 2022, the Electrical Steel prices witnessed an unprecedented surge primarily due to the demand-supply imbalance, supply tightness, and robust demand. As per market players, the Electrical Steel prices showcased a soaring trend over the last 18 months owing to the inflation over raw material prices and robust downstream demand amidst lower inventory levels. Some U.S. steel buyers warn that the raw material shortages are unlikely to resolve in the near term and potentially during the rest of 2022, significantly as steelmaking infrastructure is damaged or destroyed in Ukraine. Additionally, lack of availability of coal, as racks are not available for the supply of coal as most of them have been diverted for the power sector. As a ripple effect, rising inflationary pressure and soaring raw materials cost amidst limited inventories further exacerbated the market sentiments.
In the Indian market, Electrical Steel prices followed a downward trajectory due to fluctuating raw materials prices amidst the ongoing rivalries between Russia and Ukraine. In April, high demand from European nations forced Indian suppliers to increase their supplies. According to the market players, they have already piled up their stocks for May. Additionally, the Indian government has waived customs duties on importing some raw materials, including coking coal and ferronickel. The duty on iron ores and concentrates was raised to 50% from 30%, while the extended duty on iron pellets was roughly 45%. As per Indian authorities, steel export duties are flung to improve domestic supplies, putting downward pressure on pricing. The duty-driven cost correction improved the product's availability in the domestic market as finished steel exports dwindled. However, the Steel manufacturers attempted to skirt the duties by bumping up exports of alloyed steel and billets, which are unlikely to compensate for the loss of finished steel exports.
In the European market, the Electrical Steel prices witnessed a mixed statement. In April and May, the Electrical Steel prices upswing by 20%, owing to the robust demand from the end-users amidst solid inflationary pressure and the Russia-Ukraine conflict and its repercussions. As per traders, the need for Electrical Steel remained firm; however, the limited manufacturer offers raised the quotation prices. Additionally, the sale price level is still very high and profitable, based on restocking made early this year. Despite this rising trend, Electrical Steel prices dropped by 9% as demand was fragile in the market, and mills were willing to accept any counter-offers they received. As per market players, the weak demand and softening scrap prices pressurized the demand outlook and have resulted in lower transactions in the domestic market. As buyers held back from booking orders, European domestic steel section prices continued to soften on June 29, expecting prices to move down further.
For the Quarter Ending March 2022
In the USA, the Electrical Steel prices witnessed a soaring trend owing to increasing raw material prices amidst the rising geopolitical tension in the Russia-Ukraine war. As per market participants, the demand for Electrical Steel remains steady and faces limited challenges from imports. Limited product availability and the increasing risk of procurement were the primary factors affecting the Electrical Steel prices in the regional market. Furthermore, decarbonization, Green Steel, and implementation of additional production cuts in China have increased the pressure on product availability. As a ripple effect, the price of Electrical Steel witnessed a skyrocketing trend during the first quarter of 2022.
After reaching record highs at the end of 2020, global electrical plate prices cooled significantly in 2021 and ended the year on a stable note, influenced by various factors such as supply-demand imbalance and the impact of raw material prices until January. However, during February, the Russia-Ukraine dispute, and its repercussions, especially on raw materials and logistics, and the recent spread of the COVID-19 pandemic in China, have impacted supply and demand dynamics. As per Chinese market participants, the general inflation of metal prices during the war and the lockdown in China has two-folded the impact on raw material prices. Additionally, the Chinese traders were worried about the disruption of supplies from Russia due to sanctions imposed by western nations amid the increasing pandemic in the eastern Chinese region.
During the Q1 of 2022, the Electrical Steel prices witnessed an inclining trend owing to the rising inflation rate, cost pressure, and soaring fuel and energy prices amidst the Russia-Ukraine war. The Russia-Ukraine conflict and its reverberations, particularly on raw materials and logistics, and China's significantly rising COVID-19 cases, impact supply and demand-side activities. As per the European market participants, the increasing risk of procurement, constraints of financial support, limited onloading and offloading activities, growing uncertainty about availability, and rising safety and security concerns are among the significant factors that have driven sentiments in the commodity markets worldwide. Additionally, the European Commission has revised its European Union steel import quota system to avoid regional market shortages following its ban on steel from Russia and Belarus due to those countries' actions in Ukraine.