According to a recent report, the global power transformer market stood at $10.3 billion in 2013. While Asia and the Middle East drove growth, North America has not had the same success but, having 70 % of power transformers that are over 25 years old, the North American market provides major opportunities for power transformer companies.
MetalMiner’s monthly GOES (grain-oriented electrical steel) MMI, which dropped 16 % to 221 in December points to connection of the power transformer market and power construction spending.
Average GOES import price levels have fallen for the third month in a row while volumes remain steady, which is surprising given the recent preliminary findings of the ITC in favour of domestic GOES producers AK Steel and Allegheny Technologies (ATI).
According to MetalMiner, Allegheny Technologies and AK Steel may have affected an opportunity to drive money in because the biggest part of US power transformer industry has operations in Mexico and Canada.
In particular, “Global supply-chain multi-faceted transformer and electrical equipment companies such as ABB, Eaton, Schneider Electric, Prolec GE, and Siemens, among a few others, could easily near-shore production to other NAFTA countries not impacted by this anti-dumping petition.”
MetalMiner writes they have not received any confirmation that any transformer producer has moved production. However, according to the insiders, AK Steel has started to raise prices on high permeability GOES by 10-20% (H-0 DR, and H-1). Prices for M3-M6 grades appear stable at the moment, but sources tell us buyers expect price increases from AK and ATI in 2014.
The consequence of the price increase will disproportionately hit the large power transformer manufacturers that can no longer source from the countries impacted by the anti-dumping case, such as Efacec, Hyundai, Mitsubishi Electric (MEPPI), and Waukesha Electric.
The overall competitiveness of the US power transformer industry will be affected. Companies such as WEG-Voltran will now have a competitive advantage in bidding on power generation projects in the US.
After rising the previous month, the US grain-oriented electrical steel (GOES) coil price dropped 16.2 percent.