GOES Barriers to Entry Breached

Following is an edited excerpt of a new monthly publication, “The GOES Chronicle,” from Steel-Insights. For further details, contact Becky E. Hites at becky.hites@steel-insights.com.

Production of Grain Oriented Electrical Steel (GOES) has undergone a tectonic shift in the past decade. The market historically has been supplied through a controlled group of companies protected from outside producers by substantial barriers to entry, including technical know-how, licensing by product developers and high capital costs. That has all changed in the past decade, which has seen a 77 percent increase in GOES production and an 84 percent increase in GOES capacity, as new production practices have made the process more forgiving and less cost-prohibitive. Products that in the past required decades to perfect are now being produced to acceptable market quality by mills less than a decade old. The competition makes the profitability of even the highest quality GOES products less guaranteed, even in the face of consistently growing demand.