[SMM Analysis] It will be difficult to reverse the off-season pattern in the short term. Next week, the price of grain-oriented silicon steel will be in the doldrums.

Price Dynamics of Grain-Oriented Electrical Steel

Shanghai B23R085 grade: 14,400-14,600 yuan/mt

Wuhan 23RK085 grade: 14,200-14,700 yuan/mt

This week, black futures strengthened somewhat, but the actual positive impact of tariff policy adjustments on the grain-oriented electrical steel market was limited. As the weekend approached, the market questioned the sustainability of the positive factors, and the upward trend weakened. On the fundamental side, Baowu Group maintained flat tender prices for grain-oriented electrical steel in May. The downstream demand side continued to exhibit off-season characteristics, with the transformer industry primarily restocking on a need-by-need basis. Despite the national policy clearly stating that S7-type high-energy-consuming transformers will be completely phased out by 2025, end-users generally have low willingness to stockpile due to financial pressures and order uncertainties. Although demand in the new energy sector (such as wind power transformers) continues to grow, it accounts for a relatively low proportion of overall grain-oriented electrical steel consumption, making it difficult to offset the decline in demand from traditional sectors.

Looking ahead, supply-side pressures are expected to persist. Coupled with the production release from enterprises such as Baowu and Shougang Group, inventory pressure will be significant. Although there is policy support on the demand side, the conversion of actual orders will take time, making it difficult to reverse the off-season pattern in the short term. Overall, it is expected that grain-oriented electrical steel prices will remain in the doldrums next week.