Electrical Steel Market to grow by USD 24.25 Billion (2024-2028), fueled by rising demand in automotive, Report highlights AI's impact on market trends - Technavio

NEW YORK, Dec. 3, 2024 /PRNewswire/ -- Report on how AI is redefining market landscape - The global electrical steel market  size is estimated to grow by USD 24.25 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  11.29%  during the forecast period. Increasing demand for electrical steel in automotive industry is driving market growth, with a trend towards expansion of production capacity by vendors. However, excess production capacity in steel manufacturing plants  poses a challenge. Key market players include Ansteel Group Corp. Ltd., Aperam SA, ArcelorMittal, Arnold Magnetic Technologies Corp., Beijing Shougang Co. Ltd., China BaoWu Steel Group Corp. Ltd., China Steel Corp., Cleveland Cliffs Inc., JFE Holdings Inc., JSW Group, Nippon Steel Corp., NLMK Group, Nucor Corp., POSCO holdings Inc., Steel Authority of India Ltd., Tata Sons Pvt. Ltd., thyssenkrupp AG, United States Steel Corp., voestalpine AG, and Yieh Corp..

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Key Market Trends Fueling Growth

The Electrical Steel market is experiencing significant growth due to the increasing demand for magnetic materials in various applications. High permeability and low core loss are key magnetic properties driving this trend, as they are essential for efficient energy transfer in electrical devices. Steels with superior resistivity and reduced hysteresis loss are in high demand for applications in solenoids, electric motors, generators, small relays, and power distribution. The power generation sector, including hybrid vehicles and renewable energy sources, is a major consumer of electrical steel. Environmental concerns and the push for sustainability are also impacting the market. Sustainable steel production and the use of recycled materials are becoming increasingly important. Raw material prices, particularly for iron ore, coal, industrial gases, silicon, and ferroalloys, can significantly affect the market. Grain-oriented electrical steel is a popular choice for high-efficiency transformers and inductors in industrial equipment. Energy conservation and the transition to renewable energy sources are key drivers for the market, with wind turbines and hydroelectric plants being significant consumers. The power sector is undergoing modernization, with a focus on smart grids, advanced motor solutions, and electrification. The electrification of transportation, including electric and hybrid cars, is also driving demand for electrical steel. Infrastructure development, including power transmission technologies and distribution networks, is another major market. The use of amorphous alloys and nanocrystalline alloys is increasing for their superior magnetic properties and energy efficiency. Overall, the Electrical Steel market is expected to continue growing due to the increasing demand for energy-efficient electrical devices, renewable energy sources, and sustainable infrastructure. However, raw material prices and environmental challenges, including carbon emissions and climate change, may impact the market's growth. 

The electrical steel market is experiencing significant growth due to the increasing demand for this material in various industries. Its superior mechanical and magnetic properties make it an essential component in industrial applications. In response to this rising demand, market vendors have been expanding their production capacity. For instance, Ansteel and Ben Gang Group recently merged, becoming the world's third-largest steelmaker with an annual production capacity of 63 million tons of crude steel. Ansteel aims to increase this capacity to 70 million tons by 2025. These expansions are expected to fuel the growth of the electrical steel market in the forecast period. 

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Market Challenges

• The Electrical Steel market faces several challenges in meeting the growing demand for magnetic materials in various industries. High permeability and low core loss are crucial magnetic properties for applications in solenoids, electric motors, generators, small relays, and power distribution. However, achieving these properties comes with challenges such as hysteresis loss and resistivity. Raw material prices for iron ore, coal, industrial gases, silicon, and ferroalloys impact the cost of production. Non-grain oriented electrical steel has higher hysteresis loss compared to grain oriented, affecting the efficiency of transformers, inductors, and industrial equipment. Environmental challenges, including carbon emissions and climate change, necessitate the transition to sustainable steel production and the use of renewable energy sources. Sustainable infrastructure development and electrification require energy-efficient vehicles, such as electric cars and hybrid cars, and advanced motor solutions. Power sector modernization, including the development of smart grids and advanced power transmission technologies, is essential to meet the increasing energy demand while minimizing energy consumption. The use of high-efficiency transformers and renewable energy sources, such as wind turbines and hydroelectric plants, is crucial to reduce carbon dioxide emissions and promote green technologies. Recycling and the use of amorphous alloys and nanocrystalline alloys in electrical devices are other solutions to address the challenges in the Electrical Steel market. The market must continue to innovate and adapt to meet the evolving needs of various industries and address the environmental challenges of the 21st century.
• The electrical steel market faces a significant challenge from excess production capacity, leading to low capacity utilization rates. Demand for electrical steel is expected to outpace supply during the forecast period. Factors such as low production costs, subsidies, and attractive interest rates have fueled unstructured capacity expansion in the steel industry. This surplus production in one region can impact manufacturing activities and demand in others, necessitating reasonable trade tariffs to prevent dumping and additional imports.

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Segment Overview 

This electrical steel market report extensively covers market segmentation by

1. Type 
• 1.1 Grain oriented electrical steel
• 1.2 Non-grain oriented electrical steel
2. End-user 
• 2.1 Automobiles
• 2.2 Manufacturing
• 2.3 Energy generation
3. Geography 
• 3.1 APAC
• 3.2 Europe
• 3.3 North America
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Grain oriented electrical steel-  Grain oriented electrical steel is a specialized type of electrical steel with exceptional magnetic properties, making it essential in various electrical and automotive applications. Its unique characteristics, such as low core loss and high magnetic permeability, enhance the efficiency of transformers and electric motors. The increasing demand for electric motors, transformers, and electric and hybrid vehicles drives the market growth. The automotive industry's shift towards electric vehicles further amplifies the demand due to improved motor performance. As energy-efficient technologies and electric mobility gain adoption, the future prospects for grain oriented electrical steel are promising, making it a crucial material for advancements in both industries.

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Research Analysis

Electrical steel is a specialized type of steel used in the production of electrical components due to its unique magnetic properties. It is characterized by high permeability, low core loss, and good resistivity, making it ideal for use in applications such as solenoids, electric motors, generators, small relays, power distribution, and electricity generation. The magnetic properties of electrical steel are essential in managing magnetic flux, reducing hysteresis loss, and improving overall efficiency. Applications of electrical steel extend to various sectors, including the power sector, infrastructure development, and renewable energy. In the power sector, it is used in transformers, power grids, and distribution networks for voltage transformation and power transmission. In the renewable energy sector, it is used in wind turbines and solar power systems to maximize energy output and minimize energy loss. Additionally, electrical steel is used in high-efficiency motors, consumer electronics, and power transmission technologies. Grain-oriented electrical steel, such as Powercore, is a popular type of electrical steel due to its high magnetic permeability and uniform grain structure, making it ideal for use in large transformers and generators. Other types of electrical steel, such as distribution transformers and voltage transformation equipment, are used in power distribution networks to ensure stable and efficient power supply. In summary, electrical steel plays a crucial role in various applications, from power generation and distribution to renewable energy and consumer electronics, due to its unique magnetic properties and ability to minimize energy loss.

Market Research Overview

Electrical steel is a key component in various electrical and electronic applications due to its unique magnetic properties. High permeability and low core loss are essential characteristics, making it suitable for use in solenoids, electric motors, generators, small relays, power distribution, and electricity generation. The magnetic permeability of grain-oriented electrical steel is particularly important in high-efficiency transformers, distribution transformers, and voltage transformation. The demand for electrical steel is driven by the energy sector, including wind turbines, hydroelectric plants, and energy transition. Environmental challenges, such as carbon emissions and climate change, are pushing the need for sustainable infrastructure and green technologies. Recycling and renewable energy sources are also significant factors. Raw material prices, including iron ore, coal, industrial gases, silicon, and ferroalloys, can impact the cost of electrical steel production. The market also includes non-grain oriented and grain-oriented electrical steel, with the latter being preferred for applications requiring high magnetic performance. Electrical steel is used in various industries, including power generation, transmission, and distribution networks, as well as consumer electronics, industrial automation, robotics, and electromobility infrastructure. Energy conservation and efficiency are critical considerations, with a focus on high-efficiency motors, advanced motor solutions, and smart grids. The electrical steel market is influenced by various factors, including hysteresis loss, magnetic flux, and power sector trends. Renewable energy sources, infrastructure development, and electrification are driving growth, while carbon emissions and sustainability concerns are shaping the market's future direction.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Type
• Grain Oriented Electrical Steel
• Non-grain Oriented Electrical Steel
• End-user
• Automobiles
• Manufacturing
• Energy Generation
• Geography
• APAC
• Europe
• North America
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio