European Electrical Steel Prices Show Stagnant Trend Amidst Supply Chain Concerns

The price of Electrical Steel remained stable in the European spot market at the end of August as production hiked from overseas markets such as China and Taiwan. The demand from the downstream market seems flat, but there is hope for gains from the local and overseas power and energy sectors. The anticipation of draught in the Panama Canal route has kept the market sentiments uncertain. The domestic consumers kept placing healthy orders amid increased supply, keeping the market price for Electrical Steel on a stable trend.

The price of feedstock such as Iron ore and coke helped maintain a stable price trend of Electrical Steel. The price of raw materials, such as iron ore, rebounded after a consecutive declining trend across the European market. The arrivals of Iron ore at the ports have been experiencing a hindrance amid typhoons across overseas supplier markets such as China. Meanwhile, the coke supply is expected to increase as Chelyabinsk Metallurgical Plant, a major Russian integrated steel plant, plans to upgrade its coke batteries in the upcoming years. This would also increase the supply of Electrical Steel as Russia is one of the major Electrical Steel producers. The buyers would increase their placement of orders from the Russian suppliers. Magnitogorsk Iron and Steel Works (MMK), a major iron and steel company in Russia, has observed a mount in the demand for Electrical Steel from local buyers since the start of the third quarter. This uplifted their production rate and market responses. In addition to that, the feedstock iron ore production rate got on a higher level as the Ukrainian Sukha Balka Mine, a part of the DCH groups, increased its iron ore extraction rate by 40% by the end of the first half. This led to a surge in iron ore inventory levels across Euro-zone nations. Meanwhile, the Sukha Balka mine started mining at a new production capacity with reserves of 277.5 thousand tons of iron ore, creating a dynamic market situation for the European Electrical Steel manufacturers. Furthermore, the inventory level of Electrical Steel increased as the production rate hikes from the overseas manufacturing industries in Taiwan, such as China Steel Corp. (CSC).

The market players exempted that the price of Electrical Steel will remain stable as the demand rises amid a hike in inventory level. The demand from the overseas US power and energy sector rises as the recent report from the Hawaiian Electric Lawsuit has admitted that the electric grids across the US need upgradation. Several other major electrical companies in the USA are planning to modernize the electric grid and plan for extreme weather conditions to decrease the risk of forest fires. Furthermore, the supply chain has been anticipated to have a hindrance as the major supply route of the Panama Canal has been at risk of lowering the water level. This could decrease the supply level in the global market, implying an increase in the price of Electrical Steel to be exported. The above-mentioned factors kept the local buyers in a wait-and-watch situation across European countries and led to the stabilizing price of Electrical Steel.

According to ChemAnalyst, the price of Electrical Steel is expected to rebound in the European spot market—the assumption of supply disruption from the drying of the Panama Canal and other major rivers across the globe. The upgradation of electric grids from the overseas US market will help in raising the price of Electrical Steel. Additionally, the surge in the development of clean and renewable energy sources will uplift the European market concerning Electrical Steel.