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The global electrical steel market size was valued at USD 29.28 billion in 2022 and is projected to grow from USD 30.70 billion in 2023 to USD 44.92 billion by 2030, exhibiting a CAGR of 5.6% during the forecast period.
Electrical steel is a specialized steel used to offer assured magnetic properties and provide high permeability coupled with low core loss. Steel offers several beneficial characteristics such as improved permeability, increased resistivity, and reduced hysteresis loss to several applications such as solenoids, electric motors, generators, and small relays. Growing initiatives to improve power distribution centers along with increasing demand for electricity generation are propelling the adoption of electrical steel. Hence, such factors coupled with technological advancements in the electrical industry are boosting the market growth during the forecast timeline.
Supply Chain Disruptions and Closure of Production Plants in the Steel Industry Declined the Product Adoption
The impact of COVID-19 disrupted the electric steel market severely. The disruption in the infrastructure projects, decrease in automobile manufacturing, and halted operations of production plants during the pandemic severely affected market growth. As a result, the consumption of electricity across many countries fell during the lockdown period. Additionally, government limitations implemented during the pandemic affected production. Moreover, the stoppage of mining activities, movement restriction, and closure of machinery impacted market proliferation negatively. Such aspects created a decline in the demand for electric steel for various applications such as high-efficiency power generation motors, transformers, motors, and inductors. However, many governments in several countries are initiating regulations to get their economies back on track, thereby increasing product consumption during the forecast period.
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Increasing Product Adoption to Manufacture Electrical Motors to Boost Market Proliferation
The major factor driving the adoption of electric motors is increasing demand across commercial, residential, and industrial sectors. Electrical steel is needed during manufacturing motors due to its magnetic flux and torque along with low CO2 emissions and electromagnetic characteristics. Additionally, the consumption of electrical motors is increasing rapidly in drilling, water pumps, hard disc drives, machines, and industrial equipment. Moreover, growing technological advancements along with rapid industrialization & infrastructure development would augment the product adoption. Hence, such factors would propel the electrical steel market growth.
Increased Product Demand from the Automotive Industry to Aid Market Expansion
The rapid growth of the automotive industry coupled with the rising utilization of hybrid vehicles is fueling the adoption of electrical steel for improving aesthetic performance along with reducing the weight of the vehicle. Moreover, supportive government regulations in emerging economies including China, India, the U.S., and Brazil for environmental protection through vehicles are further propelling the product demand. Also, many government bodies are initiating research & development activities and emphasizing the reduction of CO2, which would contribute to the adoption of sustainable steel. Furthermore, the increasing adoption of hybrid vehicles and rising consumer expenditure will drive the use of the vehicle. Hence, the aforementioned factors will create lucrative opportunities for the market to grow positively during the review period.
Fluctuations in Raw Material Prices to Hamper Market Augmentation
The prices of steel mainly rely on the raw materials that are required during electrical steel production. The major materials include ferroalloys, coal, iron ore, and some industrial gases. However, the prices of these raw materials are highly volatile, which makes major fluctuations in steel prices and causes variations in the overall price. Furthermore, crude oil prices, storage capacity, and manufacturing cost further influence steel prices. Hence, such factors are anticipated to restrain market growth.
Non-grain Oriented Segment to Dominate the Market Due to Growing Consumption from Power Generations
Based on type, the market is segmented into non-grain oriented and grain oriented. Non-grain-oriented segment accounted for the leading electrical steel market share in 2022. This silicon steel is an important material employed in manufacturing motors, rotors, EV traction motors, and high-performance power generators. Additionally, it is primarily utilized in electrical equipment and offers significant magnetic properties, including high permeability or low hysteresis loss. Hence, such factors along with its adoption as vital core material for EV traction motors and household appliances will drive the segment growth.
On the other hand, the increasing demand for grain-oriented in the electronics, industrial equipment & machinery, energy, and power applications is propelling the segment growth. The rapidly growing automotive and construction industries are propelling product consumption, which includes usage as transformers, power generators, lamination steel, conductive steel, and motors & engines. Among these, grain oriented electrical steel provides high magnetic properties and higher efficiency leading to a higher adoption rate of the product, thereby creating growth opportunities for the market.
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Transformer Segment to Dominate the Market Due to High Demand from Energy Consumption Applications
Based on application, the market is fragmented into transformer, motors, inductors, and others. The transformers segment held the highest market share in 2022 and is anticipated to be growing with the highest growth rate during the forecast period. Electrical steel is an important material in the production of large, high-performance generators and energy-efficient transformers. They are used in the form of lamination and are an ideal core material in power transformers, distribution transformers, and small transformers. The gaining traction toward transformers owing to high energy usage is driving the segment growth.
In motors, the product is widely used for laminations. The rising adoption of electric vehicles in the automotive industry has fueled the adoption of electric motors, resulting in fueling raw materials adoption. Also, companies are investing in sustainable product development and have increased the production of electric vehicles, further creating growth opportunities. Moreover, growing product consumption in inductors to reduce the flow of current is augmenting its adoption in the inductor segment.
Asia Pacific Electrical Steel Market Size, 2022 (USD Billion)
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The market size in Asia Pacific stood at USD 14.05 billion in 2022. The product adoption in the region is attributed to its growing manufacturing sector. Countries, including China, India, and South Korea are among the leading players in the production sector. This includes the use of electrical steel for the production of industrial equipment, machinery, magnetic devices, transformers, and energy power grids, and the rising demand for these products is augmenting the market growth.
In North America, the market growth can be attributed to the high availability of raw materials within the region, supporting technological development and economically stable nations. Moreover, the growth in machinery and automotive industries, where the product is used in power generators, motors, and transformers is surging the demand for grain oriented electrical steel in the region. The market growth in Europe is owed to the rising trend of technologically advanced electric motors and machinery for industrial and automotive applications. The region is supported by developed economies where the product is in demand for the production of industrial equipment and machinery, engines, power generators, and transformers.
In Latin America, the market growth is mainly driven by rising product applications for the automotive and manufacturing sectors. Several end-use industries have manufacturing facilities set up in the region due to the availability of raw materials, labor, and land. This has led to high demand for automated machinery, thereby leading to product consumption. Furthermore, developed economies within the Middle East & Africa have supported the adoption of advanced technologies and raised the product demand for transformers & power generators to supply electricity at a greater distance. Further, an escalating economy within the region has supported the adoption of electric vehicles, in turn, creating demand for the product for manufacturing engines and electric motors. The aforementioned factor altogether has surged product consumption.
Business Expansion to Retain More Customers is the Key Strategic Initiative Implemented by Companies
Key players operating in the market are ThyssenKrupp Steel Europe, Nucor Corporation, ArcelorMittal, and Nippon Steel Corporation. These companies are involved in product innovation, capacity improvement, collaborations, and acquisition in the market. Thyssenkrupp has presence in 56 countries across the globe. Additionally, the company has a production site in Belgium, Germany, France, Switzerland, and Spain and produces 11 million tons of crude steel. Further, the company is involved in research & development, acquisitions, and product innovation to retain more consumers.
An Infographic Representation of Electrical Steel Market
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The research report provides a detailed analysis of the market and focuses on crucial aspects such as leading companies, types, applications, and products. Also, it provides quantitative data in terms of volume and value, market analysis, research methodology for market data, and insights into market key trends. It highlights vital industry developments and the competitive landscape. In addition to the factors mentioned above, the report encompasses various factors that have contributed to the growth of the market in recent years.
Value (USD Billion), Volume (Kilotons)
By Type, Application, and Region
Fortune Business Insights says that the global market size was USD 29.28 billion in 2022 and is projected to reach USD 44.92 billion by 2030.
In 2022, the market value stood at USD 29.28 billion.
Registering a significant CAGR of 5.6%, the market will exhibit considerable growth over the forecast period (2023-2030).
The non-grain oriented segment is expected to lead the market during the forecast period.
Increased product demand from the automotive industry would create lucrative opportunities for the market.
Asia Pacific held the highest share of the market in 2022.
ArcelorMittal, Nucor Corporation, Nippon Steel Corporation, and ThyssenKrupp Steel Europe are the leading players in the market.
The rapid growth of the automotive industry and growing consumption of transformers are anticipated to boost the consumption of the product.
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