[SMM Analysis] Market bearish expectations converge, and the price of oriented electrical steel is expected to remain stable next week

Price Dynamics of Grain-Oriented Electrical Steel

Shanghai B23R085 grade: 14,200-14,400 yuan/mt

Wuhan 23RK085 grade: 14,100-14,300 yuan/mt

This week, the Shanghai grain-oriented electrical steel market remained stable, with no significant fluctuations in prices. The overall trading atmosphere was slightly sluggish. Despite the consensus reached at the China-US Stockholm economic and trade talks, which to some extent stabilized market expectations, signals from the July 30 meeting of the Political Bureau of the CPC Central Committee indicating that the intensity of subsequent policies might fall short of expectations, coupled with the news that the US Federal Reserve maintained interest rates unchanged, which also fell short of market expectations, jointly led market participants in the grain-oriented electrical steel sector to become more cautious, with overall sentiment cooling down somewhat.​

From a fundamental perspective, the supply of grain-oriented electrical steel in the market is relatively loose, with no obvious surplus for the time being. Traders and producers have maintained stable quotes, with no upward adjustments, which has also resulted in relatively small fluctuations in actual transaction prices. Given the specific downstream applications of grain-oriented electrical steel and the high price sensitivity of end-user manufacturers, under the current cautious market sentiment, downstream purchases are predominantly made on an as-needed basis, with fewer bulk purchases, leading to limited overall trading volumes.​

Looking ahead, market expectations for a bearish outlook on grain-oriented electrical steel have somewhat converged. Considering factors such as supply, demand, and the macro environment, it is expected that prices of Shanghai grain-oriented electrical steel will remain stable next week, with a low probability of minor fluctuations.