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.