Electrical steel, a niche product, achieved outstanding performance as a black horse in 2016. It was noteworthy that the price gap between non-oriented electrical steel and hot rolled coil was lifted to over 3000 yuan per ton, in place of former fluctuation between 2000 yuan and 3000 yuan per ton. This could be explained by better-than-expected performance in domestic steel market last year. What’s more, there were several underlying reasons to ignite the supply-demand conflict of electrical steel. Stronger demand in downstream home appliance industry shored up electrical steel consumption; in addition, supply storage stimulated market needs, due to the relocation of Baosteel’s two production lines, shut-down of Wugang’s old production lines, coupled with private steel mills’ transformations under market pressure in 2015. In the aftermarket, we should keep an eye on the following two aspects in terms of electrical steel, especially the non-oriented one. First, the widened price gap between non-oriented electrical steel and hot rolled coil might lead profit-hungry private steel mills to gear up for more productions. Second, Baosteel is about to put into production in Aug this year, which is believed to bring great impact on the market.