ALLOY STEEL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Alloy Steel Market Size and Trends

Global alloy steel market is estimated to be valued at USD 142.51 Bn in 2024 and is expected to reach USD 182.33 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 3.6% from 2024 to 2031.

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The market growth can be attributed to increasing demand for alloy steel in various end-use industries such as automotive, construction, machinery, and others. The market is expected to witness positive growth over the forecast period, owing to rising automotive production across the world. Growing infrastructure development activities in developing nations can also boost demand for alloy steel in construction applications. Rapid industrialization and urbanization are also expected to propel the market growth during the forecast period.

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Insights By Product Type- Versatility Drives Low Alloy Steel Segment’s Leadership

In terms of product type, low alloy steel segment is estimated to contribute the highest market share of 45.3% in 2024, due to its versatility and cost-effectiveness. Its broad range of applications across diverse industries, including construction, automotive, energy, and machinery, makes it a preferred choice for manufacturers worldwide. Low alloy steel's unique properties, such as enhanced strength, durability, and resistance to wear, further contribute to its dominance.

Insights By Application- Automotive Segment Dominates Due to Increasing Vehicle Production

In terms of application, automotive segment is estimated to contribute the highest market share of 36.5% in 2024, owing to increasing vehicle production and long-lasting steel body frames. Increasing global demand for automobiles, coupled with rising preference for lightweight and high-strength materials, has significantly boosted the use of alloy steel in automotive manufacturing. Alloy steel is widely used in the production of various automotive components, including body structures, engine parts, and chassis.

Regional Insights

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Dominating Region- Asia Pacific

Asia Pacific is projected to lead this market in 2024, with an estimated market share of 42.5%, driven by its strong automotive and machinery sectors. Home to major manufacturers, the region benefits from high demand for alloy steel. Strict regulatory standards such as International Organization for Standardization (ISO) further ensure superior product quality, reinforcing its dominance in the global market.

Fastest-Growing Region- North America

North America region exhibits the fastest growth in this market due to rapid industrialization and infrastructure development across developing economies such as U.S. & Canada. Strong government support through policies such as American Society for Testing and Materials (ASTM) and investments promotes the growth of end-use sectors. Large consumer base and emerging middle-class boosts the demand for finished goods made from alloy steel.

Alloy Steel Market Outlook for Key Countries

Balancing Trade Policies and Demand- Insights into the U.S. Alloy Steel Market

The U.S. alloy steel market is influenced by trade policies such as tariffs, import quotas, and anti-dumping measures and domestic demand for alloy steel. Both major political parties in the country have supported increased tariffs on foreign steel imports to protect the domestic industry. However, these tariffs have raised prices for American purchasers and negatively impacted downstream manufacturers. The debate continues over balancing protectionist measures with the needs of domestic consumers and manufacturers.

China's Steel Exports Surge- Global Market Impacts and Trade Tensions

China, the world's largest steel producer, plays a pivotal role in shaping the alloy steel market. According to a July 2024 report by The Financial Times Ltd, China's steel exports are expected to surpass 100 million tonnes, marking their highest level in eight years. This surge is attributed to a decline in domestic demand. The increased exports have triggered a drop in global steel prices and heightened trade tensions, prompting several countries to impose tariffs or initiate anti-dumping investigations to counter the influx of Chinese steel.

India's Steel Industry- Growth Backed by Policy Support, But Imports Pose Challenges

India's market is witnessing strong growth due to low-cost manufacturing and policy support for the automotive and infrastructure sectors. However, the industry faces challenges from rising imports of cheaper steel, particularly from China. In response, Indian steelmakers have urged the government to impose higher tariffs on imports to protect domestic producers. For instance, according to a September 2024 report by Reuters, the Indian Steel Association has proposed increasing the customs duty on steel imports to 15% and introducing an additional 25% import tax.

Japan's Alloy Steel Industry- Sustaining Demand Amidst Rising Competition

Japan's alloy steel market is integral to its robust automotive and machinery sectors, driving substantial domestic demand. However, the industry faces significant challenges due to increased steel exports from China. In the first half of 2024, China's steel exports rose by 24% year-on-year, reaching 53.4 million tons, with projections suggesting they could surpass 100 million tons by year's end. For instance, according to data published by Reuters in August 2024, this influx has intensified competition and led to a 17% increase in Japan's steel imports during the April-June period, totaling 1.32 million metric tons, with imports from China surging by 43%.

Canada's Alloy Steel Industry- Tackling Oversupply and Strengthening Trade Ties

Canada's alloy steel market is significantly influenced by its trade relationships, particularly with the U.S. The country has faced challenges from global steel oversupply, notably from China, leading to increased competition and potential trade disputes. In response, Canada has implemented measures to protect its domestic industry, including imposing tariffs and conducting anti-dumping investigations to address the influx of cheaper steel imports. For instance, according to the Canada Government, in August 2024, Canada announced a 25% surtax on steel and aluminum imports from China, effective October 15, 2024. This measure aims to protect Canadian industries from unfair competition due to China's overcapacity and subsidization practices.

Market Concentration and Competitive Landscape

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Top Strategies Followed by Global Alloy Steel Market Players

• Established players heavily invest in research and development to innovate new high-performance alloy steel products. Companies like ArcelorMittal, POSCO, and Nippon Steel engage in extensive R&D, allotting over 5% of their annual revenue. Leading players also form strategic alliances with major automotive and industrial equipment manufacturers. For instance, In May 2023, JSW Steel partnered with Japan's JFE Steel to establish a 50:50 joint venture for manufacturing cold-rolled grain-oriented electrical steel in India. This collaboration aims to leverage technological expertise and cater to the growing demand for specialized steel products.
• Mid-level alloy steel companies competitively price their products to target cost-conscious buyers. These players also collaborate through joint ventures or equipment sharing to optimize costs and boost capabilities.
• Smaller firms typically focus on niche markets, offering specialized products and services to differentiate themselves. They may also form non-equity strategic alliances to enhance capabilities without significant capital investment.

Emerging Startups in the Global Alloy Steel Market

Several startups are developing innovative alloy steel-based technologies with the potential to influence market trends. Boston Metal has developed a groundbreaking molten oxide electrolysis (MOE) process that eliminates the need for coal in steel production, thereby significantly reducing carbon emissions. In March 2024, the company launched its first commercial application in Brazil, focusing on extracting high-value metals from mining waste.

Electra, based in Boulder, Colorado, is revolutionizing steelmaking by operating at significantly lower temperatures (around 60°C) using renewable energy. This innovative approach allows for quick start and stop operations, facilitating integration with intermittent renewable resources like wind and solar. In 2024, Electra opened its first pilot plant and partnered with U.S. steel giant Nucor.

Alloy Steel Industry News

• In October 2023, Shyam Metalics and Energy Ltd., an Indian steel company, acquired Mittal Corp. Limited for US$ 4.3 million (₹351 crore). This strategic acquisition allows Shyam Metalics to broaden its product offerings to include stainless steel and specialty products, enhancing its position in the steel industry. The move aligns with the company's growth strategy and ambition to establish itself as a leading player in India's steel market. Mittal Corp. Limited, based in India, specializes in manufacturing of stainless-steel products, including alloy steel.
• In August 2023, India-based Jindal Stainless Ltd. unveiled a specialized high-strength alloy steel grade, marking a breakthrough in domestic production. This advanced material, traditionally imported from global suppliers, is now being supplied to the Indian Space Research Organization (ISRO). Developed over three years using advanced refining processes, the new alloy highlights a major milestone in India's self-reliance in high-tech manufacturing.

Key Takeaways from Analyst

• Building and construction industry remains the major end user of alloy steel and growth in this sector particularly in Asia Pacific region can boost the demand. Other key end-use industries such as automotive, manufacturing shows signs of recovery, which will support the market expansion.
• Volatile prices of raw materials needed for producing alloy steel can restrain the market growth. The supply chain disruptions caused during the pandemic also posed serious challenges. Rising environmental concerns around the globe regarding carbon emissions from steel production is prompting shift towards greener steel varieties.
• Asia Pacific region, led by China, India and Japan, currently dominates the global alloy steel market and is likely to remain the prime market over the forecast period. North America will continue to generate sizeable revenues owing to recovery in end-use industries.

Market Report Scope

Market Dynamics

Market Driver- Increasing demand for lightweight and high-strength materials in automotive and construction sectors

The automotive and construction industries have witnessed huge demand for materials that can endure heavy loads while keeping weight minimal. Alloy steels have emerged as a versatile solution, owing to their unique strength-to-weight ratio achieved by careful manipulation of alloying elements. In automotive, reducing vehicle weight through lightweight components significantly boosts fuel efficiency as lesser mass needs to be propelled. In January 2024, the U.S. Energy Information Administration (EIA) reported that hybrid vehicles, plug-in hybrids, and battery electric vehicles (BEVs) collectively made up 16.3% of all new light-duty vehicle (LDV) sales in the United States in 2023. This marks a significant increase from 12.9% in 2022, reflecting growing consumer adoption of electrified vehicle technologies.

Market Challenge- Fluctuating prices of raw materials affecting production costs

The market has been witnessing fluctuations in raw material prices such as iron ore, chromium, nickel, and manganese. Alloy steel production is a raw material-intensive process, and unstable raw material pricing poses significant challenges to producers. Sudden spikes in input costs squeeze profit margins for manufacturers. For instance, iron ore prices rose over 50% in 2021 amid supply constraints and strong steel demand from China. Producers found it difficult to pass on the increased costs to customers in the short term.

Market Opportunity- Advancements in alloy steel technology enhancing performance and application range

The market is witnessing significant advancements that are enhancing the performance characteristics as well as the range of applications for alloy steel products. Leading producers are investing heavily in research and development to develop new grades of alloy steels with advanced properties. For example, enhanced corrosion resistance grades allow alloy steel to be used in aggressively corrosive environments like offshore oil platforms. New micro-alloyed steel varieties exhibit superior strength-to-weight ratio, expanding the use of alloy steel in automotive and other weight-critical applications.

Market Segmentation

•  Product Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Low Alloy Steel
  • High Alloy Steel
  • Others
•  Application Insights (Revenue, USD Bn, 2019 - 2031)
• • Automotive
  • Construction
  • Industrial Equipment
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • ArcelorMittal
  • Tata Steel Limited
  • Nippon Steel Corporation
  • United States Steel Corporation
  • JFE Steel Corporation
  • POSCO
  • Thyssenkrupp AG
  • SSAB AB
  • AK Steel Holding Corporation
  • Carpenter Technology Corporation
  • SeAH Steel Corporation
  • Baosteel Group Corporation
  • Hyundai Steel Company
  • Ansteel Group Corporation
  • China Steel Corporation