Grain oriented electrical steel is a category of electrical steel which comprises iron-silicon alloys that are developed to provide the low core loss and high permeability, which are required for efficient and economical electrical transformers in power generation application.
COVID-19 has adversely affected the demand of the global grain oriented electrical steel market, particularly, power and energy sector. Pandemic has also affected the import and export of the steel products across all the regions, which has resulted in the decline in the demand of the grain oriented electrical steel. The demand of the grain oriented electrical steel has declined approximately by 12%-14% in the COVID-19 period. The COVID-19 has unbiasedly affected all sectors due to which the mandate of the several products in the global as well as in the domestic market has fallen down.
The prevailing grain oriented electrical steel demand conditions in the majority of developing nations demonstrates that the electrical steel consumption have deteriorated in the pandemic situation. Several large industries who are engaged in the manufacturing of grain oriented electrical steel product have faced several challenges towards the sale of the raw material for the finished goods due to shutdowns in the manufacturing of the several industries such as in automotive and electronic goods. This has led to the lower demand of the electrical steel in the global market
AFTER MATH OF COVID-19 AND GOVERNMENT INITIATIVE TO BOOST THE GLOBAL GRAIN ORIENTED ELECTRICAL STEEL MARKET
The demand of the home appliances have fallen during the COVID-19 by approximately by 45% due to which the demand of the electrical steel products in the electrical manufacturing industry has decreased. The large industry has resulted in less demand of the new machinery and components due to which demand of the electrical steel in manufacturing of motors and electrical ballasts have reduced during the pandemic situation. Post COVID, developing economies, such as China is expected to move more rapidly towards normalization of economic activity for the different sectors. This will increase the demand of the electrical steel products, and will increase the import for grain oriented electrical steel. With the stringent government regulation, particularly, in the field of infrastructure, the demand of the grain oriented electrical steel products such as hot-rolled sheets and cold rolled sheets would subsequently increase. Automobile manufacturers are heavily investing funds in the market. With the increase in the demand for the modern electric vehicles, the demand for the grain oriented electrical steel is set to rise in the global market.
STRATEGIC DECISIONS FOR MANUFACTURERS AFTER COVID-19 TO GAIN COMPETITIVE MARKET SHARE
Pre-pandemic, manufactures had financial stability; however, COVID-19 had forced the manufactures into extreme slumps. The effects of the pandemic will largely affect the small and medium business. The grain oriented electrical steel is extensively used in the manufacturing of the electric motors and components which are brought to application in the electric appliances.
During the COVID-19, manufacturing of the heavy electrical equipment have tumbled down which result in the fall in the demand for the electricals steels in motors application. Several types of components are used in the transformers which have different flux density which help to lower the wastage of the energy during transmission but the demand of the different size of transformers have fallen down due to which demand of the grain oriented electrical steel from equipment manufacturers have fallen down. During the pandemic, several electrical equipment manufacturers have shut down the production for more than six months which has had a bad impact on the demand of electrical steel market.
Steel industry is also playing a crucial role in the electrical steel market since tons of steel and other metals are used in the manufacturing of the grain oriented electrical steel. The pandemic has also impacted the demand of the steel products in all the regions. In the U.S., steel mills have to adjust their production activities to avoid rising inventories and declining prices of the steel products which result in lower revenue generation. As demand of the steel is declining, integrated steelmaker in U.S. steel manufacture has decided to idle blast furnaces and cut production of steel. Japan steel production is expected to decline by 25.9% as per the Vietnam Steel Association (VSA), companies associated with the VSA registered a 15% decline in steel production and a 38% reduction in steel exports in Q1 2020. COVID-19 has adversely affected the steel prices as the demand of the steel has fallen down as lockdown in several industries.
IMPACT ON DEMAND
During the COVID-19, manufacturing of the heavy electrical equipment have tumbled down, which resulted in the declined demand for the grain oriented electricals steel. Several types of components are used in the transformers which have different flux density that help to lower the wastage of the energy during transmission. However, the demand of the different size of transformers has collapsed. During the pandemic, several electrical equipment manufacturers have shut down the production for indefinite time period, which have adverse impact on the demand of grain oriented electrical steel market
IMPACT ON SUPPLY CHAIN
The COVID-19 crisis has created the pandemic situation widely, which affected the growth of the overall steel industry. The demand in the energy and power, building and construction, automotive activities have withered down globally. The nationwide lockdown across the globe for all the manufacturing units, construction activities and others, resulted in lower demand of grain oriented electrical steel products, which eventually, lead to huge loss for manufactures. The manufacturer of grain oriented electrical steel components and equipment had to abruptly halt the production which had its impact on the supply-chain.
Flux in the demand of the electricity in different countries have lowered and has proportionally affected the demand of the grain oriented electrical steel products in the energy and power sector. The fluctuation in the price of steel has also impacted the manufacturing of the grain oriented electrical steel. Progressive demand of electricity and power in the man industry and launch electrical vehicles will increase the demand of grain oriented electrical steel in coming years.