At the end of February, the price of Electrical Steel marked a notable decline amidst lowering demand from the downstream construction and automotive industry across the European market. The supply of Electrical Steel has been mounting as the major Steel players are planning to expand their manufacturing lines in the Europe. Furthermore, the motive for the expansion of Green Steel by the European Commission, along with consideration factors to make it cheaper has been a major factor affecting the Electrical Steel and other steel-based product manufacturing. The major manufacturers are shifting to hydrogen fuel and electrical energy as the primary source of production. Furthermore, the overseas Chinese steel industry has been expected to pose a major threat to global steel manufacturers as their oversupply would create a pessimistic market sentiment.

The Euro Zone's Electrical Steel production landscape has seen significant developments with Thyssenkrupp Steel, a key player, inaugurating a new slitting line in Motta Visconti, Italy. This modern facility replaces aging manufacturing mills, aligning with the push for electric mobility and facilitating the manufacture of high-efficiency Electrical Steel tailored for the automotive sector. Moreover, the adoption of green steel practices has played a pivotal role in shaping electrical steel prices in the European spot market. Addressing cost-related challenges is crucial for the steel industry's decarbonization efforts and the promotion of eco-friendly steel adoption. The substantial electricity costs in Europe present hurdles for investments in climate-neutral technologies. In parallel efforts to bolster clean Electrical Steel production, the integration of green hydrogen emerges as a significant driver, with Tenova, in collaboration with Italian energy firms De Nora and Snam, alongside other European steelmakers, exploring its potential to decarbonize steel manufacturing processes. ArcelorMittal, a major player in Electrical Steel, is set to activate its latest ladle furnace at the Fos-sur-Mer plant in southern France, further underscoring the industry's commitment to modernization and sustainability.

Meanwhile, China's continued influence on the global steel market remains a persistent concern along with China's focus on export markets, coupled with subsidized pricing strategies due to sluggish domestic growth, poses ongoing challenges. Additionally, indicators suggest a contraction trend in Germany's downstream construction industry, evidenced by a monthly decline in the construction Purchasing Managers Index (PMI). Consequently, these factors have contributed to a downward trajectory in Electrical Steel prices across the European spot market as the second quarter of 2024 commences. At length, the price for Electrical Steel settled at USD 1915/MT for FD Ruhr, Germany with a weekly decline of 0.8% in the last week of February 2024.

According to the analysis by ChemAnalyst, the price of Electrical Steel has been expected to remain on a damping trend as the supply is anticipated to remain surplus. The production would remain firm, despite plunging demand from the downstream construction and housing sector would persist plunging trend in the European spot market. Meanwhile, the expectation of the German economy to move toward a recession period has marked a pessimistic impact on Electrical steel production.