Electrical steel is a magnetic material, also known as transformer, lamination or silicon steel. It finds its applications in solenoids, relays, electric motors and many more components. Electric steel is extensively used since it has a high heat dissipation property. The presence of silicon helps increase resistivity and enhance permeability.
The global electrical steel market was valued at around USD 15.0 billion in 2019. It is estimated to register a compound annual growth rate of nearly 6% from 2020 to 2026. At this rate, the market is projected to reach a valuation of over USD 22.0 billion by the end of the forecast period.
Growing demand generated from the automotive industry:
Electric steel when used in vehicles helps improve the car’s fuel efficiency. Improving economies and growing population is increasing the production of automobiles. This, in turn, is generating a surge in the demand for electrical steel. Moreover, the shift to electric and hybrid cars is estimated to fuel the electrical steel market during the upcoming years.
Need for transformers:
The demand for transformers arises due to increasing consumption of electricity and rising need for industrial development. Since, electric steel is a vital component of transformers, an upsurge in transformer requirements is projected to push the electrical steel market forward. Also, transformers help reduce energy consumption and reduce carbon emissions. With more and more government initiatives that assist the incorporation of transformers, the electrical steel market is expected to witness a stark growth.
Fluctuating raw material prices:
The raw material required for the production of steel are iron ore, industrial gases, ferroalloys and coal. Since the prices of these materials are highly volatile, the cost of production of steel also fluctuates. For instance, any increase in the prices of raw materials, increases the production cost of steel and finally impacts the price of the finished good. This volatility creates a hindrance to the growth of the electrical steel market.
Based on type, the electrical steel market is segmented into grain-oriented electrical steel and non-grain-oriented steel. Among these, the former is projected to register the fastest growth rate. This can be attributed to smart grid development and the upgradation of existing grid networks. Also, the adoption of transformers will push the growth of the grain-oriented electrical steel segment. However, the non-grain-oriented electrical steel segment accounted for approximately 75% of the market owing to the surge in demand from the automotive industry. This type of electrical steel enhances the driving range of hybrid cars and is therefore witnessing a huge demand from the auto sector.
Classified into transformers, motors and others, the transformer segment is estimated to dominate the global electrical steel market during the forecast period. This dominance is largely driven by the rising demand from the power industry. The motor segment is anticipated to register the highest growth rate of nearly 6% due to rising use of electric vehicles. Government regulations favouring the growth of the electric and hybrid vehicle sector will ensure a corresponding growth in the motor segment of the electrical steel market.
With a majority of applications in the energy, automobile and manufacturing industry, the energy industry is envisaged to garner majority of the market share during the forecast period. Rapid urbanization and industrialization will ensure a higher demand for energy which in turn will ensure the expansion of the electrical steel market.
Asia – Pacific held the largest share of the electrical steel market in 2019 and is expected to continue this trend throughout the forecast timeline. Presence of well-established manufacturers such as ArcelorMittal, Tata Steel, POSCO, Nippon Steel, etc. is driving the development of the market in the region. Moreover, the region is home to the largest number of power transformers, wind generators and factors such as rising population, energy demand, expanding renewable energy sector, etc. are further fueling the market augmentation.
The research report analyses the ecosystem of the electrical steel market and categorizes it to forecast the revenues and analyze the trends in each of the following below-mentioned market segments.
By Product Type
By End-Use Industry
Priyanka has been writing chemicals & material market research reports for the last 12 years. A post-graduate, her specialization is in the chemicals sector. Preparing end-to-end reports covering minute details for market insights, competitive intelligence and trend analysis in the CMFE sector.