Download Sample, Urbanization Will Drive the Growth of The Electrical Steel Market Globally
One of the most important factors affecting the growth of the electrical steel market in the next years is believed to be an increase in the number of highly urbanized areas around the globe. In the early stages of a nation’s development, the demand for steel increases along with the requirement for new infrastructure. According to UN.org, India, China, and Nigeria will account for more than one-third of global urban population growth. This demand is generated to build new networks for the electricity grid and enhance connectivity. Construction activity is rising as a result of the increasing population density in urban areas.
Additionally, rising consumer disposable income and a swift shift in consumer behavior are anticipated to support the expansion of the global electrical steel market in the years to come. In addition, consumers' high levels of disposable income are driving up demand for cars and hybrid electric vehicles. These vehicles have a variety of parts, including gasoline pumps, electrical power steering, and related machinery offering the electrical steel business substantial expansion potential.
Additionally, rising consumer disposable income and a swift shift in consumer behavior are anticipated to support the expansion of the global electrical steel market in the years to come. In addition, consumers' high levels of disposable income are driving up demand for cars and hybrid electric vehicles. These vehicles have a variety of parts, including gasoline pumps, electrical power steering, and related machinery offering the electrical steel business substantial expansion potential.
Expansion of Energy Production Owing to Rapid Industrialization Is Augmenting the Market Growth
Two of the reasons driving the development of the electrical steel market are an increase in demand from industries involved in energy generation and transmission as well as an expansion of the utilization of renewable sources. The growth in the usage of electrical cars, on the other hand, is one of the factors that is projected to produce profitable opportunities throughout the course of the forecasted period. The lightweight nature of electric vehicles contributes to their compliance with security norms. These factors offer new possibilities for this market's development.
Governments' new exposure to energy efficiency is encouraging the development of new products. The governments of many countries, including India, the United Arab Emirates, and China, are developing efforts to encourage power generation that are anticipated to increase demand for this product. There will be a rapid increase in demand for this product as a result of the replacement of outdated transformers and improvements in transmission lines owing to the trend of smart transformers. Higher efficiency can be provided by electrical steel, which is also very sustainable. About 4.11 Tn kilowatt-hours (kWh) of energy were produced by utility-scale electricity generation facilities in the US in 2021, which is approximately 4,108 Bn kWh.
Governments' new exposure to energy efficiency is encouraging the development of new products. The governments of many countries, including India, the United Arab Emirates, and China, are developing efforts to encourage power generation that are anticipated to increase demand for this product. There will be a rapid increase in demand for this product as a result of the replacement of outdated transformers and improvements in transmission lines owing to the trend of smart transformers. Higher efficiency can be provided by electrical steel, which is also very sustainable. About 4.11 Tn kilowatt-hours (kWh) of energy were produced by utility-scale electricity generation facilities in the US in 2021, which is approximately 4,108 Bn kWh.
Recent Trends in the Electrical Steel Industry
- Growing demand for high-efficiency electrical steel in renewable energy applications.
- Expansion of electrical steel applications in electric vehicle (EV) motors.
- Demand surge for electrical steel in smart grid infrastructure development.
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Rising Electric Motor Demand to Speed Up Market Growth
The motor segment is expected to grow at the fastest rate among all applications over the forecast period. The motor industry has had a strong volume increase in recent years. that was anticipated. As the use of electric cars spreads throughout more developed and developing countries globally, the demand for electric motors will rise. Increasing public awareness of the advantages of using electrical steel is generating demand, which is opening opportunities for producers of the material.
In comparison to other emerging nations, Europe and North America have the most electric cars on the road. This is the primary driver of this market segment's expansion in both North America and Europe. The market is expanding due to the supportive government policies in this region. Because it offers good power and permeability qualities, the grain-oriented electric steel sector is in high demand. Large power Transformers frequently use grain-oriented electrical steel, and this is anticipated to boost the segment's growth.
Despite the pandemic, which had a significant impact on global economic development, plug-in car sales are still going strong globally. In the first half of 2022, 4.3 Mn new BEVs and PHEVs were delivered, an increase of +62% over the first half of 2021. However, the pattern of regional growth is changing. After 2 years of rapid sales growth in Europe, EV sales there increased by just 9% in the first half of 2021. The Ukraine War has made the impact of the surprising drop in car sales and ongoing component shortages worse. Despite a poor overall light vehicle market that dropped by 17% during H1 y/y, EV sales in the USA and Canada surged by 49% for H1 year over year. Despite the real estate crisis and COVID lock-downs, China NEV sales surged by an astounding 113% for the first half of the year. Rising EV manufacturing encourages the usage of electric motors, which raises the demand for electrical steel.
In comparison to other emerging nations, Europe and North America have the most electric cars on the road. This is the primary driver of this market segment's expansion in both North America and Europe. The market is expanding due to the supportive government policies in this region. Because it offers good power and permeability qualities, the grain-oriented electric steel sector is in high demand. Large power Transformers frequently use grain-oriented electrical steel, and this is anticipated to boost the segment's growth.
Despite the pandemic, which had a significant impact on global economic development, plug-in car sales are still going strong globally. In the first half of 2022, 4.3 Mn new BEVs and PHEVs were delivered, an increase of +62% over the first half of 2021. However, the pattern of regional growth is changing. After 2 years of rapid sales growth in Europe, EV sales there increased by just 9% in the first half of 2021. The Ukraine War has made the impact of the surprising drop in car sales and ongoing component shortages worse. Despite a poor overall light vehicle market that dropped by 17% during H1 y/y, EV sales in the USA and Canada surged by 49% for H1 year over year. Despite the real estate crisis and COVID lock-downs, China NEV sales surged by an astounding 113% for the first half of the year. Rising EV manufacturing encourages the usage of electric motors, which raises the demand for electrical steel.
Power Transformer Demand Is Indirectly Boosted by Higher Electricity Demand, Which Is Beneficial For Asia-Pacific Growth
Electrical steel improves efficiency and reduces losses in many applications, but its magnetic properties are insufficient to meet the stringent requirements of precision and efficiency. When compared to electrical steel, nickel-iron alloys are more innovative and cleverer. They make great alternatives to electrical steel. Relays, sensors, and motor laminations are all made using nickel-iron alloys. Compared to electrical steel, they are also more magnetically permeable and inductive. As an outcome, it is anticipated that the global electrical steel market will see slow growth throughout the forecast period due to the increasing utilization of nickel-iron alloys in electro-technical applications. Reprocessing electrical steel is a difficult and important process. Throughout the anticipated term, this may have an effect on the global market for electrical steel.
For instance, a new power transformer unit was inaugurated in Kerala, India, in February 2021. An investment of US$ 1.7 Mn was used to establish the new plant. It is anticipated that the factory will have a 1,500 MVA annual production capacity for power transformers up to 25 MVA, 132kV class.
In 2021, Big River Steel was acquired by United States Steel Corporation. Through the manufacturing of high-strength steel in a sustainable manner, this acquisition will allow for profitable expansion.
In May 2021, JFE Steel Corporation and JSW Steel Limited announced to work together to complete a feasibility study (JSW). This Memorandum of Understanding will enable the establishment of a joint venture firm in India for the production and marketing of grain-oriented electrical steel sheets.
Baoshan Iron & Steel Co. Ltd. (China Baowu Steel Group Corp. Ltd.), Sumitomo Corporation, Tata Steel Limited, ThyssenKrupp AG, China Steel Corporation, JFE Holdings Inc., JSW Steel Ltd., Nippon Steel Corporation, POSCO, SIJ - Slovenian Steel Group d. d., Steel Authority of India Limited, Aperam, ArcelorMittal, , United States Steel Corporation and Voestalpine AG. are some of the prominent market players operating in the global electrical steel market.
For instance, a new power transformer unit was inaugurated in Kerala, India, in February 2021. An investment of US$ 1.7 Mn was used to establish the new plant. It is anticipated that the factory will have a 1,500 MVA annual production capacity for power transformers up to 25 MVA, 132kV class.
In 2021, Big River Steel was acquired by United States Steel Corporation. Through the manufacturing of high-strength steel in a sustainable manner, this acquisition will allow for profitable expansion.
In May 2021, JFE Steel Corporation and JSW Steel Limited announced to work together to complete a feasibility study (JSW). This Memorandum of Understanding will enable the establishment of a joint venture firm in India for the production and marketing of grain-oriented electrical steel sheets.
Baoshan Iron & Steel Co. Ltd. (China Baowu Steel Group Corp. Ltd.), Sumitomo Corporation, Tata Steel Limited, ThyssenKrupp AG, China Steel Corporation, JFE Holdings Inc., JSW Steel Ltd., Nippon Steel Corporation, POSCO, SIJ - Slovenian Steel Group d. d., Steel Authority of India Limited, Aperam, ArcelorMittal, , United States Steel Corporation and Voestalpine AG. are some of the prominent market players operating in the global electrical steel market.
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Rising Electricity Demand Indirectly Creates Demand for Power transformers to Favour Growth in Asia Pacific
In terms of volume and revenue growth, the electrical steel market in the Asia Pacific region is expected to develop at the fastest rate. The largest market for power Transformers is one of the factors driving the expansion of the electrical steel industry in this region. In several countries in the Asia Pacific area, including China, India, and Indonesia, there is a strong demand for power transformers. One of the largest producers of power transformers globally is China. Due to a number of variables, including an increase in the requirement for the renewable energy sector, an increase in the demand for energy, and an increase in population and urbanization, India is also anticipated to expand at a significant rate.
According to the Economic and Social Commission for Asia and the Pacific (ESCAP) of the United Nations, by the year 2050, there will be around 5.1 billion people living in the Asia-Pacific region. Out of this, it is assumed that 64% of the population lives in urban areas. In addition, it is anticipated that an increase in vehicle production and sales in this area would support the expanding revenue of the electrical steel market.
A sizeable chunk of the market is also held by the European electrical steel market, which is predicted to increase rapidly in the coming years. The demand for this product is anticipated to rise as a result of the expansion of the automotive and industrial industries in the European area. Because of its largest automakers, Germany controls the domestic car market in Europe. The demand for automotive motors will drive this region's market expansion due to an increased focus on electric mobility.
According to the Economic and Social Commission for Asia and the Pacific (ESCAP) of the United Nations, by the year 2050, there will be around 5.1 billion people living in the Asia-Pacific region. Out of this, it is assumed that 64% of the population lives in urban areas. In addition, it is anticipated that an increase in vehicle production and sales in this area would support the expanding revenue of the electrical steel market.
A sizeable chunk of the market is also held by the European electrical steel market, which is predicted to increase rapidly in the coming years. The demand for this product is anticipated to rise as a result of the expansion of the automotive and industrial industries in the European area. Because of its largest automakers, Germany controls the domestic car market in Europe. The demand for automotive motors will drive this region's market expansion due to an increased focus on electric mobility.
The report provides a detailed overview of the electrical steel market insights in regions including North America, Latin America, Europe, Asia-Pacific, Oceania, and the Middle East and Africa. The country-specific assessment for the electrical steel market has been offered for all regional market shares, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the electrical steel market. These Y-o-Y projections on regional and country-level markets brighten the political, economic, and business environment outlook, which is anticipated to have a substantial impact on the growth of the electrical steel market. Some key countries and regions included in the electrical steel market report are as follows:
| North America | United States, Canada |
| Latin America | Brazil, Mexico, Argentina, Colombia, Chile, Rest of Latin America |
| Europe | Germany, United Kingdom, France, Italy, Spain, Russia, Poland, Netherlands, Switzerland, Belgium, Austria, Sweden, Norway, Denmark, Finland, Ireland, Rest of Europe |
| Asia Pacific | China, India, Japan, South Korea, Australia & New Zealand, Indonesia, Singapore, Malaysia, Vietnam, Thailand, Rest of Asia Pacific |
| Middle East and Africa | GCC Countries, South Africa, Nigeria, Egypt, Morocco, Algeria, Israel, Iran, Kenya, Turkey, Rest of MEA |
Electrical Steel Market Research Report Covers In-depth Analysis on:
- Electrical steel market detailed segments and segment-wise market breakdown
- Electrical steel market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in electrical steel industry)
- Current, historical and forthcoming 10 years market valuation in terms of electrical steel market size (US$ Mn), volume (Tons), share (%), Y-o-Y growth rate, CAGR (%) analysis
- Electrical steel market demand analysis
- Electrical steel market pricing analysis over the forecast period (by key segment and by region)
- Electrical steel market regional insights with the region-wise market breakdown
- Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
- Latest developments and innovations in the electrical steel market
- Regulatory landscape by key regions and key countries
- Supply chain and value chain analysis in the electrical steel market
- Electrical steel market sales and distribution strategies
- A comprehensive overview of the parent market
- A detailed viewpoint on the electrical steel market forecast by countries
- Mergers and acquisitions in the electrical steel market
- Essential information to enhance market position
- Robust research methodology
- Frequently Asked Questions -
What factors are driving the growth of the electrical steel market?
The growth of the electrical steel market is driven by the increasing demand for energy-efficient transformers, electric vehicles, and renewable energy solutions, along with advancements in steel manufacturing techniques.
Which regions are leading the electrical steel market?
The electrical steel market is witnessing strong growth in regions like Asia-Pacific, Europe, and North America, primarily due to the rising demand for electric vehicles and the expansion of the renewable energy sector.
What are the key challenges faced by manufacturers in the electrical steel market?
Manufacturers in the electrical steel market face challenges such as fluctuating raw material prices, technological advancements in steel production, and the need to meet high-quality standards for energy-efficient applications.
