Cleveland-Cliffs’ new NOES line reflects rising demand for electrical steels

Cleveland-Cliffs has introduced a new product line of non-oriented electrical steels (NOES) for power generation in North America, reflecting rising interest in electrical steels

The “Motor-Max” products are designed for electric vehicle (EV) motors, aircraft motors and generators and other rotating equipment operating at frequencies above 60 hertz, a Cleveland-Cliffs spokesperson told Fastmarkets on Tuesday December 13.

The launch reflects expectations of rising demand for NOES products and electrical steels in general ahead of rapid growth from the EV revolution over the next several years, according to Philip Gibbs, KeyBanc Capital Markets managing director and senior equity analyst for metals and aerospace. At some point, all domestic steelmakers will have to “chase” the electrical steels market because demand for these products is set to increase, he told Fastmarkets.

Cleveland-Cliffs cited growing demand for EVs, which require NOES, in its announcement on Tuesday. It also highlighted increasing needs for EV charging stations, which are built with grain-oriented electrical steels (GOES).

The Cleveland-based steelmaker is the only producer of automotive-quality electrical steels in North America, according to the press release. These capabilities were partially enabled through the 2020 acquisition of AK Steel, which at the time had a leading domestic position supplying the electrical grid. For example, AK Steel accounted for all domestic production of NOES in 2012.

However, US Steel — which currently produces NOES only in Europe — has plans to start producing it in the US in September 2023 with its new NOES line at Big River Steel. Other electric-arc furnace producers, including Nucor, do not produce NOES, although Nucor does make steel for electrical equipment manufacturers.

“Asia leads the way when it comes NOES,” a source told Fastmarkets. “The US producers are just getting to the point where they can support the automotive market. Cliffs already had the [AK Steel] assets to makes NOES but had yet to produce automotive grade material and have been working with the [original equipment manufacturers] to get qualified.”

Annual production of motor steels in the US, including NOES and the lower-quality cold-rolled motor lamination (CRML), is around 400,000-500,000 tonnes, of which around 100,000 tonnes is NOES, according to Gibbs. The rest is CRML, which is produced by US Steel, ArcelorMittal/Nippon Steel, Nucor and Steel Dynamics, he said.

The US imported only around 9,900 tonnes of “flat-rolled products of silicon electrical steel, not grain-oriented” from January through October of this year, up 43.48% from roughly 6,900 tonnes in the same period last year, according to data from the US International Trade Commission’s Interactive Trade DataWeb. The Top 3 importing nations year-to-date were Austria, France and Romania.

Fastmarkets’ weekly assessment of steel cold-rolled coil, fob mill US was $44 per hundredweight ($880 per short ton) on Thursday, December 8, flat for the second week in a row but less than half of $102 per cwt in the same week last year.

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