Grain Oriented Electrical Steel Demand Expected to Keep Growing

No matter where in the world you go and what energy source you’re using, energy transfer requires transformers. Be it a nuclear power facility, a power plant running on natural gas, a wind field, or a plant running on hydropower. The energy generated in these facilities cannot light up homes, businesses, and schools without transformers. And to construct transformers, you need grain oriented electrical steel (GOES).

As global energy grids continue to grow, so does GOES demand. MetalMiner observes the GOES marketplace very closely, tracking trends and price changes down to the tiniest detail. Over the past year, GOES managed to hold a more steady, sideways trend than many other metals in our MMI. Surprisingly, this happened in the face of dropping demand and output shortages. And with the push for renewable energy power, we feel confident saying that transformer demand will continue to grow.

MetalMiner Insights will soon feature forecasting and price points for grain oriented electrical steel. Schedule a demo here.

Grain Oriented Electrical Steel Market Risks

Of course, every market contains risk factors, no matter of how resilient. In China, for example, GOES demand dropped within the past year due to zero-COVID and lower energy use in certain businesses. The pandemic proved a rocky road for GOES and many other markets. Between late 2019 and late 2020, GOES experienced market volatility on a massive scale. As illustrated by this chart MetalMiner released at the time, this fluctuation directly resulted from the pandemic chaos.

It’s, therefore, fair to assume that future global events of this nature would have a similar impact on the GOES market.

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Projected Price Trends

Nevertheless, GOES enjoys a solid place on global trade for the moment. In places like the U.S., experts anticipate long-term construction and energy grid expansions, despite the past year’s rise in interest rates. And while the average transformer can last up to 30 years, power grid expansion and energy markets will still necessitate new units. By extension, this creates a fairly sustainable need for GOES.

That said, we still need a decent grasp on where grain oriented electrical steel prices will fall. No procurement professional wants to purchase based on guesswork alone. Doing so could easily result in a huge waste of money. Luckily, artificial intelligence continues to be a reliable method of predicting where prices for GOES and other types of metal are heading. These AI models predict price points based on historical data and several other data intelligence points. Furthermore, support and resistance bands make it so procurement professionals can actually see where prices are most likely to fall.

AI-powered tools, should-cost models, and other similar tools provide GOES buyers with more peace of mind when making metal purchases. While no one can predict future events with 100% accuracy, having insight into market trends is vital to avoid margin erosion.

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