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Electrical Steel Market

Electrical Steel Market

Electrical Steel Market Analysis By Product Type (Grain-Oriented Electrical Steel & Non-Grain Oriented Electrical Steel) By Application (Electric Steel for Inductors, Motors & Transformers) By End Use (Automobiles, Manufacturing, Energy Generation) Forecast 2021-2031

Electrical Steel Market
FACT2397MR

Global Outlook of Electrical Steel

The electrical steel market is forecast to exhibit an annual growth of over 5% in 2021, expected to surpass 6% by the end of 2031. Fact.MR- a market research and competitive intelligence provider- reckons electrical steel sales to surpass a valuation of US$70 Billion by 2031.

Attribute

Details

Market size value in 2021

USD 37 Billion

Market forecast value in 2031

USD 70 Billion

Growth Rate

CAGR of 6% from 2021 to 2031

Forecast Period

2021-2031

Historical Data Available for

2016-2020

Key Regions Covered

  • North America
  • Latin America
  • Europe
  • Middle East & Africa
  • East Asia
  • South Asia
  • Oceania

Key Countries Covered

  • U.S
  • Canada
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Russia
  • Brazil
  • Mexico
  • China
  • India
  • ASEAN
  • GCC
  • South Africa

Key Market Segments Covered

  • Product Type
  • Application
  • End Use

Key Companies Profiled

  • Novolipetsk Steel
  • Voestalpine Stahl GmbH
  • POSCO
  • Nippon Steel
  • Sumitomo Metal Corporation
  • ThyssenKrupp AG
  • JFE Steel Corporation
  • Cogent Power
  • ArcelorMittal SA
  • Aperam SA
  • Baosteel Group
  • AK Steel Holding Corp
  • Allegheny Technologies Inc.
  • Phoenix Mecano AG
  • Leicong Industrial Co., Ltd.
  • Nicore Electrical Manufactory Co. LTD.
  • Steel Authority of India Limited
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Non-grain oriented electrical steel is anticipated to reign supreme, while grain oriented steel demand will proliferate at approximately 6% CAGR by 2021-end.

Consumption Analysis of Electrical Steel from 2016-2020 Vs Market Outlook for 2021-2031

Between 2016 and 2020, sales of electrical steel expanded at under 6% CAGR and is likely to showcase robust growth through 2021. Demand has risen steadily and unexpectedly for a variety of applications across several end use industries. 

Initiatives to streamline power distribution centers in emerging countries is a key reason driving demand for electrical steel. Furthermore, opportunities abound across the automotive industry, amid increasing popularity for EVs. Fact.MR expects the market to expand at above 6% CAGR from 2021-2031, based on aforementioned trends.

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How has COVID-19 Impacted Market Growth?

As the COVID-19 pandemic unfolded, the electrical steel industry experienced significant downturns with regards to production, supply-chain equilibrium and logistics. Mandatory lockdowns compelled manufacturing units to cease production, leading to restricted output.

Simultaneously, stay-at-home directives have led to increased energy demand for generating electricity. Massive spike has been observed in the healthcare sector, attributed to the need for uninterrupted power to treat patients.

Despite the tough circumstances, economies are gradually improving in 2021, as restrictions ease. Supply and distribution networks are strengthening, while company activities have begun to revive. In light of this, the pandemic is unlikely to have long-term consequences for the electrical steel industry.

How is Amplifying Silicone Semiconductors Demand Spurring Electrical Steel Adoption?

Electrical steel is often referred to as silicon steel. Silicone is a prominent component in various industries, especially in the manufacturing of electrical steel. 

The electronics industry, where silicone is mostly utilized as a semiconductor, will continue to be the leading user of silicone material.  Therefore, the amplifying demand for silicon components will drive the sales for the electrical steel market.

Numerous developments have occurred in this industry. For instance, Arnold Magnetic Technologies acquired Ramco Electric Motors Inc. which will help the company expand its electric motor and steel solutions, including semiconductors manufacturing.

How is the Automobile Industry fueling Demand for Electrical Steel?

For decades, innovative plastics and polymer composites have contributed to the enhancement of car aesthetics, usefulness, and safety while decreasing vehicle weight and providing greater value to customers. 

Automobiles are manufactured from a variety of materials. Steel, aluminum, magnesium, copper, polymers, and carbon fibers are the primary materials used in the manufacture of automobiles, parts, and components. 

Electrical steel's high permeability, low magnetostriction, high electrical resistivity and decreased hysteresis loss makes it a prominent material to use in the manufacturing of automobiles.

Increasing Aluminum Prices Prompting Manufacturers to Opt for Electrical Steel?

Electrical steel is inexpensive in comparison to many other metals. Although aluminum is lighter than steel and has a similar strength-to-weight ratio, it is costlier, thus utilized primarily in high-end cars. 

Steel is abundant and inexpensive. When coupled with its material properties and malleability, it is an excellent choice for vehicle bodywork. 

The price of completed spinning is directly related to the cost of raw ingredients. There are exceptions, but if two identical spinnings (one in aluminum and one in steel) are produced, the aluminum part will nearly always cost more because of increase in raw material prices.

How are Towering Steel Prices Stifling Market Growth?

Steel prices rose significantly in the first quarter of 2021, owing to reduced supply and renewed lockdowns, particularly across China. This trend is expected to continue through the second quarter, with supply remaining constrained.

This may pose as an obstacle for the growth of the market. However, future projections indicate eventual easing of this imbalance, which will likely help recover projections eventually.

Pre-engineered Structures to be Major Driving Force in Electrical Steel Industry?

Use Pre-engineered buildings (PEBs) in the construction of industrial buildings, metro stations and warehouses has opened up significant opportunities for expansion of electrical steel usage. 

PEBs are intended to create a full building envelope system which is airtight, energy efficient, light in weight and cost, and, most importantly, tailored to meet user requirements like a well-fitting glove. 

As the global construction industry expands, demand for robust material is increasing. PEBs fulfil this requirement, as they offer reduced construction duration, cost comparatively lesser and require lesser maintenance. Consequently, electrical steel production for imparting such qualities is increasing.

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Country-Wise Analysis

How Lucrative is the U.S Electrical Steel Landscape?

From 2021 to 2031, demand for electrical steel in the U.S is predicted to increase at a roughly 5% CAGR. In terms of production and consumption by various end use industries, the U.S has emerged as a market leader in this industry.

Extensive uptake in the automotive sector is projected to majorly stimulate demand, concluded Fact.MR. Also, as per the American Iron and Steel Institute, domestic raw steel production reached 1.8 million net tons in July 2021.  

Additional growth accelerators include, technological advancements in production capacity, research and development efforts, the existence of key competitors, and rising production capabilities.

Why is China Considered an Attractive Market for Electrical Steel Manufacturing?

According to Fact.MR, East Asia will continue to be one of the most appealing markets for electric steel over the forecast period., with China accounting for over 50% revenue by 2031.

Data published by the World Steel Association estimates that, in 2021, domestic steel production in China reached nearly 100 million tons in May 2021. This represents an increase of 6.6% during the same period in 2020.

This surging production volume is in response to the ever expanding automotive and construction industries. Credible opportunities exist in the EV market, with China contributing over 40% of global EV manufacturing. 

How are Government Initiatives Pushing Electrical Steel Uptake across India?

India is projected to generate over 40% of electrical steel demand by 2021-end, according to Fact.MR. Government initiatives undertaken to provide electrification across urban and rural areas with quality and affordable energy generation and distribution networks are likely to spur demand.

According to the India Brand Equity Foundation (IBEF), in April 2021, finished steel consumption in India stood at 6.78 million tons. The industry is witnessing consolidation of players, prompting increased investments by prominent steel companies.

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Category Wise Insights

Why Grain Oriented Steel Reigns Supreme?

By product, grain-oriented electrical steel leads the market, accounting for over 50% revenue through 2021. Deployment across energy-efficient transformers and high-performance generators has created promising growth opportunities.

Enhancing performance efficiency by preventing power fluctuations and failures will likely aid in grain-oriented electrical steel uptake across several end use industries.

Which is likely to be the Primary Application Area for Electrical Steel?

Transformers are expected to account for over 2 out of 5 sales in 2021, owing to increased expenditure on urban electrical infrastructure.

Rising adoption of high-performance efficiency transformers throughout the world is projected to support the need for electrical steel during the forecast years, in order to satisfy energy transmission requirements.

Why is Energy Generation the Dominant Electrical Steel End Use Industry?

Rising applications of transformers, motors, and generators for uninterrupted energy consumption is increasing uptake of electrical steel in the energy generation category. It is anticipated to generate a revenue share exceeding 1/3rd in 2021.

Advances in energy generation technologies in countries such as the U.S, and the U.K have resulted in increased cost-effectiveness for energy efficiency in transformers and generators.

Competitive Landscape 

Prominent manufacturers in the market for electrical steel are leveraging strategic collaborations and partnerships to increase their production capacity and meet the rising demand.

In July 2021, ArcelorMittal invested US$ 25 million in Form Energy as part of its XCarbTM innovation fund. Through this investment, Arcelor will provide raw iron, tailored to specific requirements, to Form Energy for their battery technology, which includes electrical steel.

China Baowu Steel Group Corp is a Chinese state-owned iron and steel business based in Shanghai. It is currently one of the world's largest steel businesses. It manufactures and exports steel goods such as special steel, stainless steel, and carbon steel to over 40 countries. 

It is also one of the world's leading steel suppliers to sectors such as automobiles, petrochemicals, nuclear power, home appliances, metallurgy, energy, equipment manufacturing, electronic devices, and astronautics.

Segmental Overview

  • By Product Type:

    • Grain-Oriented Electrical Steel
    • Non-Grain Oriented Electrical Steel
  • By Application:

    • Electric Steel for Inductors
    • Electric Steel for Motors
    • Electric Steel for Transformers
  • By End Use:

    • Electrical Steel for Automobiles
    • Electrical Steel for Manufacturing
    • Electrical Steel for Energy Generation
    • Electrical Steel for Household Appliances
    • Electrical Steel for Other End Uses

Report Summary

The study offers comprehensive analysis on diverse features, including production capacities, demand, product developments, revenue generation, and sales of electrical steel across the globe.

A comprehensive estimate on the market has been provided through an optimistic as well as a conservative scenario, taking into account the sales of electrical steel during the forecast period. Price point comparison by region with global average price is also considered in the study.

Key Questions Answered in Report

  • Which are the most lucrative electrical steel markets?
  • Which factors will impact the growth of electrical steel?
  • How will changing trends impact the strategies of market players?
  • How can market players capture the low-hanging opportunities across regions?
  • Which companies are leading the electrical steel industry?
  • What are the winning strategies of stakeholders in the market?

- FAQs -

Fact.MR reckons electrical steel sales to surpass a valuation of US$70 Bn by 2031.
Fact.MR expects the market to expand at above 6% CAGR during 2021-2031
Grain-oriented electrical steel to lead the market, accounting for over 50% revenue.

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Is the market research conducted by Fact.MR?

Yes, the report has been compiled by expert analysts of Fact.MR, through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to a research analyst.

What research methodology is followed by Fact.MR?

Fact.MR follows a methodology that encompasses the demand-side assessment of the market, and triangulates the same through a supply-side analysis. This methodology is based on the use of standard market structure, methods, and definitions.

What are the sources of secondary research?

Fact.MR conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers. More information about desk research is available upon request.

Who are the respondents for primary research?

Fact.MR speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, and industry experts. For a full list of primary respondents, please reach out to us.

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