ELECTRICAL STEEL MARKET ANALYSIS

Electrical steel market was valued at US$ 35.7 Billion in 2022 in terms of revenue, exhibiting a CAGR of 6.9% during the forecast period (2022 to 2030).

Electric Steel Market: Growth Drivers

High electrical steel consumption in motors and transformers

Due to the use of electrical steel in the automotive sector, the global market for electrical steel is being pushed by the rising demand for energy-efficient automobiles, notably electric and hybrid cars. Additionally, the need for transformers in the power sector is being driven by the rising requirement for energy conservation, which is advantageous for the industry. Electrical steel is an essential component in applications where electrical energy needs to be effectively transformed, transmitted, and utilized due to its high magnetic permeability. The power core from ThyssenKrupp, a grain-oriented electrical steel, is crucial in distribution and power transformers where it helps to convert and transform voltage.

Product demand from the Automotive Industry will rise

The usage of electrical steel for increasing aesthetic performance and lowering the weight of the car is being fueled by the rapidly expanding automotive industry combined with the increased use of hybrid automobiles. The market for the product is also being boosted by government rules that encourage environmental conservation through cars in rising economies like China, India, the U.S., and Brazil. Additionally, a lot of governmental organizations are starting research and development projects and placing a strong emphasis on CO2 reduction, which will aid in the adoption of sustainable steel. The usage of the car will also be influenced by increased consumer spending and the growing acceptance of hybrid automobiles. Consequently, the aforementioned elements will generate profitable chances for the industry to expand.

Electric Steel Market: Restraints

Price fluctuations for raw materials

The raw materials needed to produce electrical steel are a major factor in steel costs. Iron ore, coal, ferroalloys, and a few industrial gases make up the bulk of the materials. However, because the prices of these raw materials are so unpredictable, there are significant swings in the price of steel and variances in the final cost. Steel prices are also impacted by changes in crude oil prices, storage space, and production costs. Therefore, it is projected that these issues would constrain market expansion.

Electric Steel Market: Impact of COVID-19

The market for electric steel was significantly impacted by COVID-19's effects. The suspension of output at several companies during the epidemic and the delays in infrastructure projects and car manufacture had a significant impact on the market expansion. As a result, during the lockdown period, power usage decreased in numerous nations. Government restrictions put in place during the epidemic also had an impact on output. Additionally, the suspension of mining operations, restrictions on transportation, and shutdown of machinery had a detrimental influence on market expansion. The demand for electric steel for many purposes, including high-efficiency power-generating motors, transformers, motors, and inductors, decreased as a result of these factors. To get their economies back on track, numerous governments in various nations are instituting rules, which will boost product demand throughout the predicted period.

Electric Steel Market: Market Opportunity

The upcoming regulations and government support in emerging economies such as India, China, and Brazil present a significant opportunity for the electrical steel market players. As the automotive industry in these countries continues to grow rapidly, the implementation of less stringent rules and regulations provides a favorable environment for market players to expand their operations. Furthermore, governments across the globe are emphasizing the reduction of carbon emissions from vehicles and supporting the use of electrical steel in various applications. For instance, investments in the manufacture of cleaner materials like steel, aluminium, and concrete, which can be used to create sustainable infrastructure, are part of the U.S. government's recent initiatives to encourage the growth and competitiveness of the American manufacturing industry. This creates a market for sustainable infrastructure that can drive the demand for electrical steel products, especially for electric vehicles, wind turbines, and solar farms. Therefore, governmental support and upcoming regulations present a significant opportunity for the electrical steel market to grow and expand its operations.

Figure 1: Electric Steel Market: Market Segmentation

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Among region, Asia Pacific held a dominant position in the Electrical Steel market in 2022, accounting for a 52.4 % share in terms of value.

Figure 2: Electric Steel Market: By Application

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Among applications, transformers held a dominant position in the Electrical Steel market in 2022, accounting for a 45.7 % share in terms of value.

Electric Steel Market: Recent Developments

In May 2021, JFE Steel Corporation and JSW Steel Limited (JSW) agreed to explore the possibility of forming a joint venture company in India to produce and sell grain-oriented electrical steel sheets.

In November 2020, Nippon Steel stated that it would spend about US$ 1 Billion to enhance its electrical steel sheet operations at two sites in Japan. In the first half of 2023, after a number of steps to boost capacity and quality go into full effect, production capacity is projected to rise by almost 40%.

March 2021, ArcelorMittal's Saint Chély d'Apcher, France factory, which produces iCARe electrical steels for the automobile industry, received an investment of €13 Billion. By modernizing production to satisfy the needs of the growing electro-mobility market, the factory will be able to produce state-of-the-art non-grain-oriented (NO) iCARe electrical steel grades thanks to the investment.

In May of 2021, JFE Steel Corporation and JSW Steel Limited (JSW) agreed to work together on a feasibility study for establishing a joint venture company in India dedicated to the manufacturing and marketing of grain-oriented electrical steel sheets.

Electric Steel Market: Key Companies

Major players operating in the Electrical steel market include NLMK, Voestalpine AG, POSCO, Nippon Steel & Sumitomo Metal Corporation, Thyssenkrupp AG, JFE Steel Corporation, ArcelorMittal, Cogent Power Limited, Aperam, Baosteel Group Corporation, AK Steel Corporation, ATI, Schneider Electric, and Nicore Electrical Manufactory Co., Ltd

Definition: Electrical steel is also referred to as transformer steel or silicon steel. It has modified magnetic properties and is widely used in the manufacturing of motors, inductors, transformers, batteries, and welding equipment. It is also used for lamination methods in the cores of electrical products since they can reduce energy loss, emit a low level of carbon dioxide, and improve the efficiency of electric motors.