Electrical Steel Market Growth at CAGR of 8.4% : Projected Growth and Key Drivers

Electrical Steel Market

Market Growth Projections

The electrical steel market is poised for substantial growth, with an estimated value of USD 40.6 billion in 2023, projected to reach USD 60.7 billion by 2028 at a commendable CAGR of 8.4%. This positive trajectory is underpinned by various factors, including the availability of essential raw materials such as silicon, crucial for electrical steel production, coupled with the global trends of urbanization and a burgeoning urban population. The rise in renewable energy adoption, particularly in wind and solar power, is anticipated to escalate the demand for electrical steel, integral to the manufacturing of generators. Additionally, the utilization of electrical steel in vital components like transformers and motors across diverse industries, including energy, automotive, and manufacturing, will contribute significantly to market expansion. Furthermore, the burgeoning electric vehicle market presents a new frontier for electrical steel production, given its indispensable role in electric motor manufacturing.

Challenges and Considerations

However, amid this optimistic outlook, challenges such as volatility in raw material prices and limited high-quality electrical steel supply pose potential impediments to market growth. Environmental concerns, technological constraints, and safety considerations also present noteworthy challenges. To maintain competitiveness, manufacturers and suppliers must prioritize strategic initiatives such as substantial investments in research and development, continuous improvement of production processes, and the adoption of sustainable practices.

Strategic Initiatives for Competitiveness

In terms of product types, Grain-oriented electrical steel emerged as the second-largest segment in 2022. This specialty steel, distinguished by its highly ordered crystal structure, holds a pivotal role in the production of electrical power transformers, generators, and other magnetic applications. The efficiency of Grain-oriented electrical steel in channeling magnetic flux in a single direction results in reduced energy losses during electrical transformation, translating to heightened efficiency and cost savings. This characteristic is particularly critical in applications involving the generation or transmission of large power quantities over considerable distances, such as in electrical power grids.

Application Focus: Inductors in Electronic Circuits

In the realm of applications, inductors secured the third-largest share in 2022. Inductors, electrical components storing energy in the form of a magnetic field when an electric current flows through them, find widespread use in electronic circuits, especially in power supplies, filters, and oscillators. The demand for electrical steel in inductors, despite their relatively larger size and cost compared to alternative cores, is on the rise due to the increasing prevalence of electronic devices in various industries, including automotive, healthcare, and telecommunications.

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End-Use Industries and Power Sector

End-use industries also play a crucial role in shaping the electrical steel market, with the energy sector claiming the second-largest share in 2022. Electrical steel’s pervasive use in power generation, transmission, and distribution, as well as its vital role in renewable energy technologies, positions it as a key component in the power sector. With the anticipated expansion of the power sector, driven by ongoing growth in public infrastructure, the demand for electrical steel is set to soar.

Geographical Dynamics: North America

Geographically, North America dominated the electrical steel market in 2022, with the United States and Canada leading the region’s development. Industries such as automotive, energy and power, and consumer appliances are experiencing upward trends, leading to increased construction of industrial facilities and subsequently, heightened demand for electrical steel. Noteworthy players in this region include United States Steel Corporation, Cleveland-Cliffs Inc., and Silicon Steel. The shift towards electric vehicles in the automotive and locomotive industry further propels the demand for electrical steel, offering substantial opportunities for the North American market.

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Major Players and Market Strategies

Major players in the Electrical steel Market, such as ArcelorMittal, POSCO, Voestalpine AG, China Baowu Steel Group Corporation, Nippon Steel Corporation, United States Steel Corporation, Steel Authority of India, TATA Steel Limited, Thyssenkrupp AG, and JFE Steel Corporation, among others, are adopting strategic measures such as expansions, acquisitions, joint ventures, and new product developments to fortify their positions in the market. These initiatives underscore the industry’s commitment to innovation and growth in a dynamic market landscape.