[SMM Analysis] Supply-Demand Imbalance Persists, Price Increase for Grain-Oriented Silicon Steel Faces Challenges Next Week

Price Dynamics of Grain-Oriented Silicon Steel

Shanghai B23R085 Grade: 12,000-12,000 yuan/mt

Wuhan 23RK085 Grade: 11,500-11,500 yuan/mt

This week, the domestic grain-oriented silicon steel market overall showed a sluggish trend, with the supply-demand imbalance yet to ease and prices struggling to rise. Market feedback indicated that ferrous metals futures fluctuated during the week, market sentiment pulled back, and coupled with producers maintaining normal operations, industry supply remained relatively ample, putting significant pressure on spot price increases.

High magnetic induction grain-oriented silicon steel saw slightly better transactions than regular grades due to specific demand from ultra-high voltage and transformer applications, but overall transaction growth was limited. Supply of regular grain-oriented silicon steel was sufficient, and traders, aiming to accelerate capital turnover, offered slight discounts in actual transactions. Although major producers did not expand capacity, persistently weak demand constrained any upward trend. End-users mostly consumed their own inventory, showing weak purchase willingness and no significant restocking activity downstream. Traders maintained a cautious stance, keeping quotations largely stable, with some private resources proactively offering discounts to boost sales, leaving the market lacking support. Even though state-owned steel mills maintained firm order costs, this could not counteract the impact of weak demand, and actual transactions remained lackluster.

Overall, the current supply-demand imbalance in grain-oriented silicon steel persisted, with demand release falling short of expectations and supply pressure accumulating slightly. Approaching the Chinese New Year, merchants focused on destocking and capital turnover, lacking initiative for stockpiling. Domestic grain-oriented silicon steel prices are expected to continue their stable trend next week, with overall fluctuations remaining controllable, and traders will likely remain focused on proactive destocking and inventory management.

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