Uncertainty Surrounding COVID-19 to Shave-off Growth in Electrical Steel Market despite Favorable Government Policies
Fact.MR, a leading research firm has been tracking the dynamics of the electrical steel industry for more than half a decade. Previously, we opined that the industry is anticipated to witness a healthy growth of ~7.5%. However, due to COVID-19, it is projected to witness a loss of ~130 BPS over the long-term forecast period (2020-2030) despite favorable government policies.
Despite this, the global electrical steel industry has witnessed a steady growth rate as most companies continue to maintain production amidst the pandemic which has singed sales of electrical steel during the first quarter of 2020.
In terms of sales, the global electrical steel industry was pegged at more than US$ 20.4 Bn in 2019. But on the back of emerging trends, the electrical steel market is likely to witness a downfall in 2020 as compared to 2019. It is now poised to reach US$ 19.9 Bn by 2020.
Electrical Steel Demand to Witness a Surge, as Production of HEV/EV Soars
Emergence of COVID-19 has forced many end-use industries such as automotive, construction and infrastructure to shut down their production plants and new expansion activities, which has highly impacted the demand of electrical steel across the globe.
After the pandemic abates, HEV/EV is likely to play a pivotal role in future growth ensuring high profitability margins for key electrical steel manufacturers. On the back of soaring electric vehicle sales, the demand of electrical steel in automotive sector is likely to grow 1.7x in the foreseeable future.
In addition, higher flux density and increased torque offered by the new generation of electrical steel makes it a promising material in motor cores of hybrid electrical vehicles and electrical vehicles. Motor downsizing and increasing demand for reduced high-frequency iron loss in HEV motors are set to create significant demand for electrical steels.
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COVID-19 to Pose Challenges in Availability of Raw Materials in Short Term
Impressive magnetic and electric properties offered by non-grain oriented electrical steel is projected to fuel its demand during the forecast period. Due to its aforementioned advantages, non-grain oriented electrical steels are used in range of applications such as generators, electric motors and appliances.
However, after the exponential growth of COVID-19 across the globe during the second quarter of 2020, many prominent electrical steel producers have either shut down or decreased their production capacities.
In addition, the overall growth of global electrical steel industry will be less in the short-term forecast period due to limited supply of raw materials. Moreover, a paradigm shift towards e-mobility is poised to create new avenues in the market during the forecast period.
Emergence of New Export Destinations is anticipated to overcome Supply Disruptions in Electrical Steel Industry
COVID-19 has significantly impacted international and domestic trade of electrical steel and its raw materials over the last quarter of 2020. Several key manufacturers are strategically looking outside China for import of high quality raw materials to produce electrical steel while reducing the demand-supply gap.
Currently, in terms of production and consumption, East Asia is anticipated to remain the frontrunner in the global electrical steel market even after the virus is contained, accounting for nearly half of the revenue share by 2030.
China, being the largest steel producer and the consumer has assisted the regional growth in 2019. In addition, the growth of China was highly dependent on Hubei province for the export of electrical steel but the pandemic has highly impacted sales of electrical steel across the nation. In addition, China has increased its focus towards electrical vehicle production creating lucrative opportunities for market players.
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Market Actors to Halt Production of Electrical Steel in the Wake of COVID-19
Electrical steel market is highly consolidated in nature, where tier one players account for over half of the global sales in 2019, in which, ArcelorMittal S.A., Baosteel Group Corporation, POSCO, Novolipetsk Steel, ThyssenKrupp AG, Nippon Steel & Sumitomo Metal Corporation, and Voestalpine AG are the key stakeholders.
COVID-19 pandemic has created a many challenges for the key manufacturers despite their organic long-term strategies. Halting production, break in new developments and trade of electrical steel are some of the factors which will impact cash flow, operating margins and employee strength of the companies.
During historical period (2014-2018), prominent players have been involved in rapid expansion through strategic partnerships in order to penetrate into international markets. Growing demand for electrical steel has led manufacturers to ramp up their production capacities.
In particular, demand for cold rolled grain-oriented (CRGO) electrical steel is currently fulfilled by only a handful of Tier 1 players who have the capacity and necessary production technology for CRGO. For instance, in April 2018, ThyssenKrupp AG successfully initiated the production of cold-rolled grain oriented (CRGO) electrical steel in India.
With this strategic investment, alone in India, company’s output capacity will increase to 35,000 tons per annum. In June 2018, Big River Steel invested US$ 1.2 Bn to double its hot-rolled steel production capacity to 3.3 million tons per annum. This expansion will facilitate the company’s ability to manufacture higher grades of electrical steel for hybrid and electric vehicles.
“The COVID-19 epidemic outbreak has led to lockdowns across the globe and restricted transportation, which has highly impacted the supply of the raw materials to electrical steel producers. Overall, the global electrical steel market will slowly gain momentum as soon as the lockdown is lifted and supply chains re-start across the major producing countries.”
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Global Electrical Steel Market: Scope of the Report:
The recent study on the global electrical steel market by Fact.MR offers a decade long forecast, incorporating the key drivers, restraints, opportunities and threats to the market. The market has been segmented on the basis of product type, technology, end-user and region.
By region, market is divided into North America, Latin America, Europe, South Asia, East Asia, Oceania and Middle East & Africa. The report includes an in-depth analysis of value chain, business execution and supply chain across all the regions.
A detailed competitive landscape has been embedded within the report. Detailed analysis of important market players in terms of key expansion strategies, technological developments, and landmark agreements with fellow competitors, have been incorporated.
Electrical Steel Market: Segmentation
Fact.MR has segmented the electrical steel market on the basis of product, application, end-use industry, and region.
- Grain-Oriented Electrical Steel
- Non-Grain Oriented Electrical Steel
- Household Appliance
- North America
- Latin America
- East Asia
- South Asia & Oceania
“This taxonomy prepared is confidential and intended exclusively for the individual or entity with whom it is being shared. Reading, disseminating, distributing, or copying this to any party other than the addressee(s) is unauthorized and prohibited.”
Electrical Steel Market - Scope of the Report
The electrical steel market study done by Fact.MR gives exclusive information about how the market will grow during the forecast period of 2020 - 2030. The study identifies crucial trends that are determining growth of the electrical steel market. This newly published report sheds light on vital dynamics, such as drivers, restraints, and opportunities for key market players as well as emerging players associated with the production and supply of electrical steels.
The report primarily conveys a summary of the market, considering the present and upcoming automotive industry, household appliances and power & energy industry developments to reveal striking sides relating to the adoption of electrical steels across prominent regional markets.
A detailed assessment of the market supply chain analysis, business execution, and value chain analysis across the regional markets have been provided in the report. A list of prominent companies operating in the electrical steel market enhance the reliability of this comprehensive research study.
Report’s data is based on proven multi-pronged approached, wherein the data pertaining to consumption of electrical steels by household appliances and automotive manufacturers has been collected from 22 countries. In addition, critical data points, a plethora of other insights, statistics and trends were used to derive base year demand as well as simulate likely demand over the coming years.
Electrical Steel Market: Report Summary
The study offers an inclusive analysis on diverse features including demand, revenue generation, and sales by key players in the electrical steel market across the globe. A comprehensive study on the market has been done through optimistic and conservative scenarios. The analysis and estimation of price point comparison by region with the global average price has been included in this study.
Electrical Steel Market: Analysis on Market Size Evaluation
Existing predictions of the electrical steel market, encompassing current as well as forthcoming values estimates, analysis on region-wise demand trends, and price index have been assimilated in the report.
The market estimation at the regional and global scale of electrical steels is available in terms of value (US$ Mn) and in terms volume (Kilo Tons). A Y-o-Y growth contrast of the prominent electrical steel market segments, along with market attractiveness valuation computes have been incorporated in the report. Metrics mentioned above are also based on electrical steels types, where electrical steel witnesses a steady demand.
Electrical Steel Market: Scrutinized Assessment on Regional Segments
The weighted sections have been elaborated in the report of the electrical steel market, which deliver projection on regional markets. These chapters highlight regional macros (political economic and business environment outlook), which are expected to have a momentous influence on the growth of the electrical steel market during the forecast period.
Country-specific valuation on the demand for electrical steel has been offered for each regional market, along with market scope estimates and forecast, price index, price point assessment, and impact analysis of dynamics in regions and countries. For all regional markets, Y-o-Y growth estimates have also been incorporated in the report.
Electrical Steel Market: In-depth Analysis on Competitive Landscape
The report offers the competitive scenario of the electrical steel market, along with profiles of prominent companies contributing to market expansion. Essential and up-to-date data as well as information correlated to market performers, who are principally engaged in the production and supply of electrical steels, have been presented with the help of a detailed dashboard view. The market share analysis and comparison of prominent players provided in the report permit readers to take preemptive steps in advancing their businesses.
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