Electrical Steel Market Overlook
The global electrical steel market was valued at USD24.89 billion in 2023 and is expected to grow at a CAGR of 4.80% during the forecast period.
Introduction
The electrical steel market has been experiencing steady growth due to its extensive applications in the manufacturing of transformers, electric motors, generators, and other electrical devices. Electrical steel, also known as silicon steel, is a vital component used in the production of electrical equipment because of its magnetic properties, which allow for higher efficiency in power generation and distribution. As industries continue to adopt energy-efficient technologies and electrical infrastructure modernizes, the demand for electrical steel is expected to rise.
The global electrical steel market is poised to reach significant milestones, driven by the increasing demand for energy-efficient products and the growing focus on renewable energy. This press release provides a detailed overview of the electrical steel market, including market segmentation, regional analysis, and insights into key players within the industry.
Market Overview
Electrical steel is a specialized steel alloy with high magnetic permeability, which makes it ideal for applications in the electrical and energy sectors. It is primarily used in the manufacturing of transformer cores, electrical motors, and generators. The material’s properties, such as low core loss, high saturation magnetization, and good mechanical strength, contribute to improving the efficiency of electrical equipment.
The market for electrical steel is expanding as industries globally transition toward more energy-efficient systems. Electrical steel plays a crucial role in improving the efficiency of electrical equipment, reducing energy losses, and ensuring optimal performance. Additionally, the push for cleaner and more sustainable energy sources has heightened the need for efficient electrical infrastructure, which further accelerates the demand for electrical steel.
Moreover, the rise of electric vehicles (EVs), smart grids, and renewable energy technologies is driving the growth of the electrical steel market. As the transportation and energy sectors shift toward electrification, the demand for electrical steel is expected to increase.
Growth Drivers
Rising Demand in Power Distribution Systems and Related Applications
Electrical steel is essential in the manufacturing of various electromagnetic devices, such as generators, electric motors, relays, and solenoids, all of which are extensively used in power distribution systems and other related applications. For instance, the United States, as the second-largest electricity producer globally, generated approximately 4,000 TWh of electricity from utility-scale generators in 2020. A notable contribution to this growth came from renewable energy sources, which saw a 16.7% increase in power generation compared to the previous year. This uptick in renewable energy generation is expected to drive continued demand for electrical steel, especially in the production of energy-efficient power equipment.
Another key driver for the electrical steel market is the expansion of the electric vehicle (EV) industry. Electrical steel’s unique magnetic properties are vital in the construction of rotors and stators in EV motors. By reducing core energy losses, electrical steel improves motor efficiency, which directly enhances the range and overall performance of electric vehicles. As the EV market continues to grow, the demand for high-performance electrical steel is set to increase, further fueling market expansion.
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Market Segmentation
The electrical steel market can be segmented based on type, application, and region. Each of these segments plays a significant role in shaping the market dynamics.
1. By Type:
The electrical steel market is primarily categorized into two types:
- Grain-Oriented Electrical Steel (GOES): This type of electrical steel is characterized by its superior magnetic properties, which are oriented in a particular direction during manufacturing. GOES is primarily used in the production of transformer cores and other high-performance electrical devices. Its primary benefit is the ability to enhance the efficiency of electrical equipment, particularly in high-voltage applications. The grain-oriented electrical steel market is expected to hold the largest share due to its widespread use in power transmission and distribution systems.
- Non-Grain-Oriented Electrical Steel (NGOES): Non-grain-oriented electrical steel is more commonly used in electric motors and generators. It is suitable for applications where the magnetic field direction is not fixed. NGOES has a lower cost compared to GOES and is more versatile in terms of application. The growing adoption of electric vehicles (EVs) and the increase in industrial automation are expected to drive the demand for NGOES in the coming years.
2. By Application:
The electrical steel market is further segmented based on its applications, which include:
- Transformers: Electrical steel is widely used in transformer cores due to its ability to minimize energy loss during power transmission. The growing demand for efficient energy transmission and the expansion of electrical grids are major drivers for the transformer segment.
- Motors: Electrical steel is used in the production of electric motors, especially in the automotive and industrial sectors. The growing demand for electric vehicles and the increasing need for energy-efficient motors in industrial machinery are fueling the market for electrical steel in this application.
- Generators: Electrical steel is also essential in the manufacturing of generators, particularly in power plants and renewable energy systems. The rise of renewable energy sources such as wind and solar power is driving the demand for electrical steel in generator production.
- Other Applications: Electrical steel is also used in other electrical devices like magnetic sensors, actuators, and induction heating devices. The versatility of electrical steel is contributing to its increasing adoption across various industries.
3. By Region:
The global electrical steel market is analyzed across several regions, each of which plays a crucial role in the overall growth and development of the industry.
- North America: North America, particularly the United States and Canada, has a well-established electrical steel market. The region is seeing increasing investments in energy-efficient technologies and renewable energy, which has bolstered the demand for electrical steel. Additionally, the rise of electric vehicles (EVs) and energy-efficient appliances has spurred the need for electrical steel in motor and transformer production.
- Europe: Europe is another key market for electrical steel, driven by advancements in the automotive sector and the push toward cleaner energy. The European Union has implemented various initiatives to reduce carbon emissions, which has further fueled the demand for electric vehicles and renewable energy infrastructure. This, in turn, increases the demand for electrical steel in various applications. Germany, France, and the United Kingdom are the leading contributors to the European market.
- Asia Pacific: The Asia Pacific region is expected to dominate the electrical steel market, owing to the presence of major manufacturing hubs in countries like China, India, Japan, and South Korea. China, in particular, is the largest producer and consumer of electrical steel due to its rapidly expanding automotive and energy sectors. The region’s growing focus on electric vehicle production, renewable energy, and power transmission is expected to drive substantial growth in the electrical steel market.
- Latin America: Latin America is witnessing steady growth in the electrical steel market due to the region’s increasing industrialization and investments in renewable energy projects. Brazil and Mexico are the key contributors to this market segment, with increasing demand for electrical steel in the automotive and energy sectors.
- Middle East & Africa: The Middle East and Africa are emerging markets for electrical steel, driven by ongoing infrastructure development and investments in renewable energy projects. The region’s focus on diversifying its energy mix and improving power generation and distribution infrastructure is likely to increase the demand for electrical steel in the coming years.
Key Companies in the Electrical Steel Market
Several key players dominate the electrical steel market, contributing to its growth through innovation, strategic partnerships, and acquisitions. Some of the key companies in the electrical steel industry include:
- ArcelorMittal: ArcelorMittal is one of the largest steel manufacturers in the world and a significant player in the electrical steel market. The company produces both grain-oriented and non-grain-oriented electrical steel, which is used in a wide range of applications.
- POSCO: POSCO is a leading South Korean steel producer that manufactures a wide range of steel products, including electrical steel. The company’s advanced manufacturing processes ensure the production of high-quality electrical steel for various applications in the energy and automotive sectors.
- Nippon Steel Corporation: Based in Japan, Nippon Steel Corporation is a major player in the production of electrical steel. The company has been focusing on expanding its product offerings to meet the growing demand for energy-efficient solutions in the automotive and power generation industries.
- JFE Steel Corporation: Another key Japanese steel manufacturer, JFE Steel produces both grain-oriented and non-grain-oriented electrical steel. The company is known for its advanced technology in producing high-quality electrical steel for use in motors, transformers, and other electrical applications.
- Baosteel Group: Baosteel Group, a leading Chinese steel producer, is one of the largest manufacturers of electrical steel in Asia. The company has a strong presence in the global market and is known for producing a wide range of electrical steel products.
- ThyssenKrupp Steel Europe: ThyssenKrupp is a German steel producer that produces a wide range of steel products, including electrical steel. The company focuses on developing high-quality electrical steel for applications in transformers, motors, and generators.
- United States Steel Corporation (USS): USS is one of the largest steel manufacturers in the U.S., producing a variety of steel products, including electrical steel. The company is expanding its presence in the electrical steel market to meet the growing demand for energy-efficient products.
Recent Developments
In April 2023, POSCO and Honda formed a strategic partnership to accelerate their shared goals of achieving carbon neutrality. By combining their expertise and resources, the two companies aim to make significant strides in environmental sustainability. This collaboration will not only help them reach carbon-neutral targets but will also pave the way for future cooperation in advancing environmental and electric technologies.
In July 2022, JFE Steel successfully completed the acquisition of EcoLeaf, a Japanese company known for its tin-plate products, Universal Brite, and tin-free steel. This acquisition will allow JFE Steel to integrate EcoLeaf’s “SuMPO EPD program” and enhance the transparency of its products’ environmental impact through EcoLeaf’s advanced data visualization capabilities. The move is part of JFE’s ongoing efforts to improve sustainability and offer more environmentally responsible steel solutions.
Conclusion
The global electrical steel market is on an upward trajectory, driven by the growing demand for energy-efficient solutions in the automotive, power generation, and industrial sectors. With a strong focus on innovation, the market is expected to experience significant growth in the coming years. Key players in the industry are investing in technology and strategic partnerships to meet the rising demand for electrical steel products.
The market’s expansion is further bolstered by increasing investments in renewable energy, the rise of electric vehicles, and the push for cleaner energy solutions across regions. As the electrical steel market continues to evolve, its impact on the global energy infrastructure and automotive sectors will become increasingly evident.
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