Although the global silicon core steel market is still in a significant shortfall situation, there are a few
recent developments that offer some encouragement.
AK Steel, located in Middletown, Ohio, recently announced a two-phase capital investment project
that will boost core steel production by about 50,000 tons per year. Phase 1 is completed, and Phase 2
is scheduled for completion by the end of 2006. The company also indicated they are evaluating
additional expansion projects. (See
AK Steel Expanding Electrical Steel Production Capacity)
POSCO, a Korea-based manufacturer of silicon core steel, has announced they are increasing their
annual production capacity by about 44,000 tons this year.
According to official sources, core steel production in China is expected to increase in 2007 by
approximately 90,000 tons annually. However, consumption there is increasing at a rate of 50,000
tons per year, so China will continue to be a net importer of core steel.
The U.S. government has suspended duties on silicon core steel imports from Italy and Japan in an
effort to help domestic transformer manufacturers obtain any additional tonnage that might be
available in these countries.
Although these positive developments may yield some modest relief, the supply of silicon core steel is
expected to remain extremely tight throughout 2006 and beyond, as a result of continued growth in
world-wide demand. Industry sources have also indicated that core steel pricing for 2007 contracts
will probably increase significantly from 2006 levels.
If you have any questions, please feel free to call your Howard Industries Sales Representative or
Regional Marketing Manager.
