The electrical steel market is expected to grow at a compound annual growth rate of 8.17% over the forecast period to reach a market size of US$47.595 billion in 2026 from US$27.467 billion in 2019. The electrical steel market is estimated to grow in the forecast period. An increase in infrastructural development, industrialization, a rise in the demand in the power sector, and urbanization is going to be the driving factors of the electrical steel market. Electrical steel is used across various applications such as solenoids, electric motors, generators, small relays, and various other electromagnetic devices. The key users of electric steel are the automobile industries and electric power distribution systems which will foster growth in the market.
FIGURE: Electrical Steel Market, US$ Billion, 2019 to 2026
Source: Knowledge Sourcing Intelligence Analysis, Sample Figure
Market Drivers
- The rise in the demand for electric vehicles will lead to an increase in the demand for electric steel in the automobile market. The HEV/EV are going to play a crucial role in the growth of the electrical steel market.
- Rapid industrialization and an increase in the population have led to an increase in the global consumption of power and energy. Stringent government regulations due to increasing concerns for the environment pertaining to the CO2 emissions have led to a focus on environmental sustainability and energy efficiency, thereby increasing the demand for grain-oriented and non-grain-oriented electrical steel. This steel is used in high-powered transformers and motors.
- The addition of silicon to iron substantially increases the physical characteristics of electric steel. For the benefit of energy generation, distribution and consumption, electrical steels have the following attractive properties: high electrical resistivity, decreased hysteresis loss, low magnetostriction, and high permeability.
- The Indian steelmakers are considering producing CRGO electric steel which is used in the manufacture of transformers and electric motors, the main reason being to become self-sufficient and reduce the dependence on China, Japan, and South Korea for the product.
- The demand for non-grain-oriented electric steel will increase with the increase in the demand for household appliances because it's recyclable in nature and corrosion-resistant. It is used in washing machines, refrigerators, motors, and various other appliances that are used in the kitchen. The market for electrical steel will grow with the increase in innovation and demand for these household products.
- An increase in the demand for electric cars and automotive in the US, Canada, and Mexico is going to foster growth in the market of electric steel.
- Initiatives taken by the government will encourage the use of electrical steel. Growing concerns for the environment strict regulations are being implemented which will foster the growth of the electrical steel market.
Market Restraints
- The prices of raw materials are very volatile. The steel industry depends largely on the availability of raw materials for the production and processing of steel goods. Iron ore, coal, industrial gases, and ferro-alloys are the main raw materials needed for steel production. If raw materials are fairly priced, it is possible to perform steel manufacturing and steel processing operations smoothly. But the prices of raw materials are extremely unpredictable. Increases in raw material costs have an effect on the cost of production of steel, contributing to inflation in the prices of finished steel goods, such as grain-oriented electrical steel and non-grain-oriented electrical steel.
Impact of Covid-19
- The impact of Covid-19 has been severe on almost all industries. The global electrical steel market has witnessed a downfall in the year 2020 as compared to the previous years. Due to lockdown restrictions in various parts of the world, it hindered the supply globally as the manufacturing, distribution, and various other activities came to a halt.
Recent Trends
- The US Department of Commerce started a national security investigation under section 232 which could cause more tariffs on imports of the essential electrical steel components that are used in making transformers and other related products.
- US and Mexico have reached an agreement in November 2020 on the export of Grain Oriented Electrical Steel. Moreover, there will be no section 232 tariffs on Mexico for the shipments of GOEC.
- Nippon Steel of Japan has planned to produce electrical steel sheets using an electric arc furnace in the year 2022. This step was taken to tackle the climatic changes around the world. When compared to the traditional furnaces the electric furnaces release only a fourth of the carbon dioxide.
- Cleveland-Cliffs acquired AK Steel in March 2020. This merger has a lot of benefits for both companies.
- Nippon Steel & Sumitomo Metal Corp acquired a 51% stake in Sanyo Special Steel Co. Ltd in March 2019.
- ArcelorMittal announced in December 2019 the acquisition of Essar Steel India Limited (ESIL), a fully integrated manufacturer of flat carbon steel located in Gujarat, India. At the same time, the company formed a joint venture with Nippon Steel Corporation called ArcelorMittal Nippon Steel India Limited, which will own and operate ESIL. This acquisition helped the company to reinforce its Indian market presence.
Major Players
The major players in the electrical steel market are ArcelorMittal, POSCO, Baosteel Group Corporation, Voestalpine AG, Nippon Steel & Sumitomo Metal Corporation, ThyssenKrupp AG, Phoenix Mecano AG, NLMK (Novolipetsk Steel), Nicore Electrical Manufactory Co Ltd., Leicong Industrial Co Ltd., Cogent Power Limited, ATI, AK Steel Corporation, and many others. The companies are using various strategies to stay ahead in the market by entering into a joint venture, merger, and acquisition in order to expand their business and enter the untapped and potential market.
Segmentation
- By Type
- Grain Oriented
- Non-Grain Oriented
- By Application
- Transformers
- Motors
- Inductors
- Others
- By End-User Industry
- Energy
- Automotive
- Manufacturing
- Household Appliances
- Others
- By Region
- North America
- United States
- Canada
- Mexico
- South America
- Europe
- Germany
- United Kingdom
- France
- Italy
- Russia
- Others
- Middle East and Africa
- Saudi Arabia
- South Africa
- Others
- Asia Pacific
- China
- India
- Japan
- South Korea
- Australia
- Others
Frequently Asked Questions (FAQs)
Q1. What will be the electrical steel market size by 2026?
A1. The global electrical steel market is expected to reach a total market size of US$47.595 billion in 2026.
Q2. What are the growth prospects for the electrical steel market?
A2. The electrical steel market is expected to grow at a CAGR of 8.17% during the forecast period.
Q3. What is the size of the global electrical steel market?
A3. Electrical Steel market was valued at US$27.467 billion in 2019.
Q4. Who are the major players in the electrical steel market?
A4. The major players in the electrical steel market are ArcelorMittal, POSCO, Baosteel Group Corporation, Voestalpine AG, Nippon Steel & Sumitomo Metal Corporation, ThyssenKrupp AG, Leicong Industrial Co Ltd., AK Steel Corporation, and many others.
Q5. What factors are anticipated to drive the electrical steel market growth?
A5. An increase in infrastructural development, industrialization, a rise in the demand in the power sector, and urbanization is going to be the driving factors of the electrical steel market.
