Market evolution: Grain-oriented electrical steel (CN 722511) — 2015–2025

Introduction

Grain-oriented electrical steel (GOES) is a critical input for power and distribution transformers, making it a strategically important material for energy infrastructure. This report examines the evolution of EU trade in this product (Customs Code 722511) over the period 2015–2025, drawing on EU-level trade data with non-EU countries. The analysis covers import and export values, volumes, unit prices, geographic concentration, and supply vulnerability indicators to identify the major structural shifts that have reshaped this market over the past decade.

1. From Near Self-Sufficiency to a Deepening Trade Deficit

The most significant macro-level development over the period is the EU's transition from a position of approximate trade balance in GOES to a pronounced structural import reliance. This shift was driven by import growth that vastly outpaced the more modest expansion of exports.

1.1 EU imports grew rapidly while export growth lagged

Between 2015 and 2025, EU imports of grain-oriented electrical steel rose from €188 million to €522 million in value (+177.5%), while import volumes more than doubled from 106,607 tonnes to 218,882 tonnes (+105.3%). By contrast, exports grew more moderately: value increased from €167 million to €262 million (+56.6%), and volumes rose from 110,908 tonnes to 134,528 tonnes (+21.3%). This is shown in the General Overview.

The divergence can be summarised as follows:

1.2 Unit prices rose on both sides, but faster on the import side

Import prices increased from €1,766/t to €2,387/t (+35.2%), while export prices rose from €1,508/t to €1,947/t (+29.1%). The persistently higher unit price of imports relative to exports suggests that the EU increasingly sourced higher-value (or simply more expensive) GOES from abroad, potentially reflecting quality differentials or market power on the supplier side.

1.3 Net import reliance reversed from surplus to deficit

The EU's net import reliance shifted from -2.6% in 2015 (a marginal net exporter position) to +15.9% by 2025. This swing of over 700 percentage points in the change metric signals a fundamental structural repositioning. Domestic production volumes remained essentially flat (rising just 1.2% from 330.7 to 334.5 million kg), while production value grew strongly (€278 million to €716 million, +157.9%). This indicates that the EU's domestic production base did not expand in volume terms, leaving the growing demand gap to be filled by imports.

2. Geographic Realignment: The Rise of Asian Suppliers and Growing Concentration

The composition of the EU's GOES import portfolio shifted dramatically over the period, with Asian suppliers — particularly China — rising to dominance, while traditional partners like the United Kingdom and the United States lost ground. This realignment accompanied a sharp increase in supplier concentration.

2.1 China became the EU's dominant GOES supplier

In 2015, China accounted for just €24 million in EU imports of GOES. By 2025, this had surged to €296 million — an increase of over 1,100%. China's share of total imports also grew to become the single largest source. Japan, the second-largest supplier, saw imports grow from €23 million to €169 million (+627%). The top import partners can be summarised as follows:

The collapse of the UK as a supplier (-100%) likely reflects the consequences of Brexit, while the sharp decline in Russian supplies (-53%) aligns with the geopolitical disruptions of 2022.

2.2 EU exports found new growth markets in India and Canada

On the export side, India emerged as the EU's largest destination, growing from €37 million to €114 million (+207.5%). Canada grew from a negligible €0.2 million to €53 million, representing the most dramatic percentage increase (+29,316%). The top export partners reveal that the EU increasingly directed its limited exportable surplus toward fast-growing emerging markets and North America.

2.3 Supplier concentration rose sharply, posing systemic risk

The Herfindahl-Hirschman Index (HHI) for import concentration by value nearly doubled from 1,804 in 2015 to 4,293 in 2025 (+138%). An HHI above 2,500 is generally considered to indicate a highly concentrated market. The volume-based HHI reached 4,719, confirming the finding is not merely a price effect. Export concentration also increased, though less dramatically (from 1,036 to 2,612 by value, and from 1,315 to 3,854 by volume). This rising concentration means the EU has become more dependent on a smaller number of trading partners for its GOES supply.

Within the EU, importing activity also shifted geographically. Italy became the EU's largest importer (€55 million to €242 million, +340%), followed by Austria and Germany, while Belgium's imports declined by 60%. Specialisation data for 2025 shows Slovenia (RSCA: 0.71), Poland (0.50), Czechia (0.41), France (0.31), and Germany (0.22) as the most specialised EU member states in GOES production and trade.

3. Price Disruptions, Volatility, and the Seismic Shock of 2022

The 2021–2022 period marked a watershed for the GOES market, with extreme price shocks detected across multiple trade relationships, superimposed on a longer-term trend of rising prices and growing supply volatility.

3.1 The 2022 price shock was a pervasive event

The shock detection analysis identifies three major abnormal price events centred on 2022:

These are documented in the supply shock analysis. The UK's import price shock was even more extreme (abnormality score of 64.0, though below the top-3 threshold). The simultaneity and magnitude of these shocks across diverse partners suggest they were driven by globally correlated factors rather than bilateral issues: post-pandemic supply chain disruptions, surging energy prices tied to the Russia-Ukraine conflict, and a global scramble for critical raw materials.

3.2 Import-side volatility is structurally higher than export-side

The volatility analysis, measured by the coefficient of variation of trade values, reveals that import-side relationships tend to be more unstable. The most volatile import partners include India (CV: 1.68), Switzerland (1.63), Morocco (1.20), the United Kingdom (1.18), and China (1.12). On the export side, the most volatile partners are Canada (0.96), Iran (0.81), and Ukraine (0.73), while major export destinations like India (0.35), Türkiye (0.33), and the United Arab Emirates (0.29) tend to be far more stable.

This asymmetry has a practical implication: while the EU's import base has become more volatile and concentrated, its export destinations offer more predictability.

3.3 The trade openness and export propensity metrics paint a mixed picture

The EU's trade intensity (total trade as a share of combined production and consumption) was 58.3% in 2025, indicating an industry that is deeply integrated into international markets. Meanwhile, export propensity (exports as a share of domestic production) fell slightly from 37.0% to 35.5% over the period. The combination of flat production, rising import reliance, and declining export propensity points to a structural rebalancing: the EU produces barely more GOES than it did a decade ago, but it now exports a smaller fraction of that output while simultaneously importing a much larger share of its domestic consumption.

Conclusion

The EU's market for grain-oriented electrical steel underwent a structural transformation between 2015 and 2025. The most consequential change was the swing from near trade balance to a significant import deficit (€261 million in 2025), driven by stagnant domestic production and surging import demand. This demand was met increasingly by Asian suppliers — above all China (+1,116%) and Japan (+627%) — leading to a near-doubling of import concentration (HHI from 1,804 to 4,293). The 2021–2022 period brought dramatic price shocks linked to global supply chain disruptions and the energy crisis, with abnormal price surges of 57–119% observed across key trading relationships. Taken together, these trends indicate a market that has become more import-dependent, more concentrated, and more exposed to external supply shocks — developments that carry significant implications given GOES's critical role in energy infrastructure.