Japan Steels Get Over US$ 1,000/t Hike for GO Electrical Steel Export

Japanese integrated steel makers apparently got more than US$ 1,000 per tonne higher export price for grain oriented electrical steel from heavy electric machinery makers in USA, Europe and China for 2009 shipment compared with 2008. The steel makers improve the relative lower price level under expanding energy related demand along with covering higher cost for iron ore and raw materials.

Grain oriented electrical steel is flat steel with higher magnetic property due to the grain structure. The material is used mainly for transformer of power distribution and power generation with around 2 million tonnes of world annual demand. The supply is very tight as plate steel among steel items under strong demand for power development in BRICs and emerging countries while the suppliers is limited to Nippon Steel, JFE Steel, Wuhan Iron and Steel, POSCO, AK Steel and ThyssenKrupp. The supply is especially tight for high grade products due to more limited suppliers along with limited reserve capacity of transformer making processors.

World economy slows down recently due to US financial crisis reducing manufacturers’ activity. However, the demand of high grade grain oriented electrical steel keeps strong due to higher performance for power distribution when worldwide societies try to improve environmental impact and carbon dioxide emission issues.

World primary energy demand will increase to 15.27 million ton of oil equivalent in 2030, which is around 66% higher than 2000 level, according to International Atomic Energy Agency (IAEA). With the higher energy demand, steel interests expect the supply of high performance grain oriented electrical steel keeps tight for years.