Electrical Steel Market is estimated to be valued at US$ 35.7 Billion in 2022, according to the Electrical Steel Market Report, by Type (Grain-oriented (Hi-Permeability (HiB), Conventional GOES, Laser magnetic domain refinement (LMDR)), Non-grain oriented (Fully Processed, Semi Processed)), by Application (Transformer (Distribution, Transmission, Portable), Motors (1hp - 100hp, 101hp – 200hp, 201hp – 500hp, 501hp-1000hp, Above 1001hp), Inductors), and by Region (North America, Latin America, Europe, Asia-pacific, Middle East & Africa), published by Coherent Market Insights.
Electrical Steel Market was valued at US$ 35.7 Billion in 2022. Electrical Steel market is expected to register a CAGR of 6.9% over the forecast period (2023–2030). Electrical steel is produced by using different processes such as hot rolling, cold rolling, annealing, and insulation coating. Electrical steel is majorly used in the laminated cores of motors, inductors, generators, and transformers. It has ferromagnetic materials that improve the magnetic effects of current-carrying coils.
COVID-19 pandemic has immensely affected the electrical steel market, owing to decreasing demand for electrical steel from various end-use industries such as energy and automotive industries. For instance, according to the European Automobile Manufacturers’ Association (ACEA), in the European Union (EU), the total sales of new vehicles in the first two months of 2020 were 7.4% less than the same period in 2022. The major countries in the EU, which faced a decline in demand for electrical steel in 2020 were Germany, France, Italy, and Spain.
Drivers:
Increasing demand for electrical steel from consumer appliances such as refrigerators, air conditioners, and high-power coolers is projected to foster market growth. Consumer appliances produced by using electrical steel are environmentally friendly and save energy up to 15% to 30%. Compressor motors and relays are appliances that can be produced by using electrical steel and can be installed in cabins and rooms. Growing demand for electric steel from the automotive industry to produce various automobile components is primarily fueling the market growth. It is used to manufacture electrical power steering system motors, core material for motors, and actuators. Moreover, the use of electrical steel also improves the fuel efficiency of vehicles. Therefore, the growing demand for electrical steel from the automotive industry is projected to augment market growth.
Restraints:
The growing importance of nickel-iron alloys which are more innovative and advanced as compared to electrical steel is expected to hinder the market growth. The magnetic properties of electrical steel are insufficient for the critical requirement of efficiency and precision. Moreover, nickel-iron alloys are widely used in sensors, relays, and motor laminations in place of electrical steel. Issues associated with the production of electrical steel are expected to hamper the market growth of electrical steel. Mechanical stress and strain are developed during the production process of electrical steel which weakens the magnetic property of electrical steel. This factor is expected to hamper the market growth of electrical steel.
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Key Trends and Analysis of the Electrical Steel Market:
Product innovation by key players to expand their product portfolio is one of the major trends in the market and this ongoing trend is expected to foster the market growth of electrical steel. Strategic alliance partnerships by major players for expanding footprints around the globe are expected to accelerate the market growth of electrical steel.
Key Takeaways of the Electrical Steel Market:
Asia Pacific dominated the Electrical Steel Market and accounted for a share of 52.4% in 2022, followed by Europe and North America respectively. This is attributed to the growing demand for electricity in emerging economies such as Indonesia, India, and Vietnam. According to India Brand Equity Foundation (IBEF), in 2020, India was the third largest producer and consumer of electricity, globally. Furthermore, the country had the fifth largest installed capacity of electrical steel in the world, according to the same source.
Among applications, motors dominated the Electrical Steel Market in 2022 and accounted for 67.0% of the market share in terms of value, followed by transformers and inductors, respectively. Electrical steel market has witnessed rising adoption of electric vehicles as they are an eco-friendly option and are cost-effective. Such vehicles integrate a higher number of automotive motors and thus, growing demand for such motors is expected to fuel the growth of this segment.
New product launches, mergers & acquisitions, strategic partnership expansion, and research & development studies for electrical steel are key strategies adopted by players in the Electrical Steel Market.
