Electrical steel is an alloy of iron that contains a small amount of silicon. It is commonly referred to as silicon steel and is widely used in the cores of transformers, motors, generators and other applications that require low power loss. Electrical steel has high magnetic permeability and low core loss which enables it to efficiently and effectively direct magnetic fields. They are manufactured as thin laminate sheets to reduce power wastage from induced eddy currents. The growing use of electrical devices worldwide has resulted in high demand for electrical steel. Electrical steel is an indispensable part of numerous devices due to its excellent magnetic properties and low energy loss characteristics which enable cost savings.
The Global Electrical Steel Market is estimated to be valued at US$ 43.97 Mn in 2024 and is expected to exhibit a CAGR of 8.6% over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the electrical steel market are Yara International ASA, The Mosaic Company, Nutrien Ltd., BASF SE, Agrium Inc. (acquired by Nutrien). Yara International is one of the largest manufacturers of electrical steels globally.
The increasing use of electricity and surging demand for electrical equipment like transformers, motors, and generators from industries like construction, automotive and power generation are major factors driving the growth of the electrical steel market. Rapid industrialization and infrastructure development activities are also propelling market growth.
Technological advancements in electrical steel manufacturing processes have led to development of new grades of steel like non-grain oriented electrical steel that exhibit higher maximum flux density and low core loss even at higher frequencies. This has expanded their application in newer energy efficient equipment. Continuous improvements in lamination and coating technologies are also helping reduce power losses further.
Market Trends
Some key trends in the electrical steel market include growing adoption of non-oriented electrical steels and increasing demand for high grade electrical steels. Non-oriented electrical steel offers superior magnetic properties compared to conventional steel and their usage has increased in applications operating at higher frequencies like energy efficient motors. They enable downsizing of equipment. Additionally, stringent energy efficiency regulations globally have increased focus on ultra-low loss electrical steels to develop greener products. This has boosted demand for high grade electrical steels with enhanced magnetic qualities.
Market Opportunities
Increased investments in renewable energy sector present a major opportunity for electrical steel market. Electrical steel finds key application in wind turbine generators. Rising installations of wind farms will augment steel demand. Additionally, the growing electric vehicle market is another key opportunity. EVs use multiple electric motors which utilize extensive amounts of electrical steel. Widespread commercialization of EVs can potentially drive voluminous electrical steel consumption.
Impact of COVID-19 on Electrical Steel Market Growth
The COVID-19 pandemic has significantly impacted the Global Electrical Steel Market Growth . During the initial phases of the pandemic, lockdown restrictions and supply chain disruptions led to a decline in demand from end-use industries like automotive, manufacturing and construction. Reduced capacity utilization and production halts witnessed across many steel manufacturing facilities also impacted availability of electrical steel during 2020. However, as economies reopened and businesses resumed operations from mid-2020, demand started picking up gradually. Governments and central banks across major countries announced stimulus packages to aid economic revival which benefited market recovery. With demand returning to pre-pandemic levels towards the latter half of 2021, the electrical steel market outlook has turned positive again. While short term challenges like rising material costs persist, growing investments in infrastructure, renewable energy and emerging technologies like electric vehicles are expected to drive robust long term growth opportunities post pandemic.
Geographical Regions with High Electrical Steel Market Concentration
The Asia Pacific region accounts for the largest share of the global electrical steel market in terms of value. Countries like China, Japan, India and South Korea have strong manufacturing bases for automotive, home appliances, industrial machinery and power generation equipment which are key end-use industries. Abundant availability of raw materials and low production costs have encouraged major global electrical steel producers to establish manufacturing facilities across Asia Pacific to cater growing regional demand. Europe is another major regional market concentrated with presence of leading automakers continually demanding high quality electrical steel grades to enhance vehicle efficiency. While China dominates presentconsumption, India's rising investments in electrical infrastructure, renewable energy and e-mobilityoffer fastest growth potential among APAC nations going forward.
Fastest Growing Region for Electrical Steel Market
The electrical steel market in Latin America is forecasted to expand at the highest CAGR during the 2024-2030 period. With strong government backing, nations across South and Central America are actively developing electricity grids and rapidly setting up renewable energy projects. Increasing investments in automotive manufacturing especially in Brazil, Mexico along with utility scale battery storage systems rollouts across the region are bright demand drivers. Ongoing reforms, economic stability and growing domestic manufacturing competencies will aid continuous steel demand growth from this evolving market. Additionally, the region's abundant reserves of iron ore provide raw material advantage while trade relations pave way for technology transfers supporting local steel production enhancements over the long run.
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