Global Free Machining Steel Market Is Estimated To Witness High Growth Owing To Increasing Automotive Production and Surging Manufacturing Activities
The global free machining steel market is estimated to be valued at USD 5.68 Bn in 2024, exhibiting a CAGR of 3.7% over the forecast period (2024-2031). Furthermore, rising consumption from automotive industry coupled increasing use in general machining applications are augmenting the market growth.
Market Dynamics:
The growth of the global free machining steel market is driven by increasing automotive production and surging manufacturing activities. Free machining steel finds widespread applications in the manufacturing of auto components owing to their excellent machinability. This high demand from automotive sector is prompting steel manufacturers to increase their production of free machining steel.
Another key driver has been rapid industrialization in emerging economies such as China, India, Brazil, etc. These countries are witnessing strong growth in the manufacturing sector, which, in turn, is propelling the consumption of free machining steel for general machining purposes. Their ability to offer trouble free machining helps minimize production downtime and costs. This factor is increasing their preference over other conventional steels across various end-use industries.
Increasing Demand from the Automotive Industry is Driving Growth in the Global Free Machining Steel Market
The automotive industry has been one of the largest end users of free machining steel globally. Free machining steel grades offer benefits like enhanced machinability and formability which makes them suitable for complex press components and assemblies in vehicles. The growing automobile production worldwide is fueling the demand for free machining steels from OEMs and component manufacturers. This steady growth in automotive production will drive the consumption of free machining steel grades for manufacturing critical under-the-hood components and assemblies.
Growth of Industrial Machinery Manufacturing is Propelling Market Expansion
Industrial machinery manufacturing has emerged as a major end-use sector for free machining steel globally. Free machining steel variants are ideal for the fabrication of machine components that require extensive machining operations like milling, drilling, turning, etc. due to their superior machinability. The flourishing industrial machinery market has stimulated the demand from OEMs for producing machinery parts, press tools, dies, and molds using free machining steels. This positive growth outlook for industrial machinery will augment the consumption of free machining steel grades in the machinable component manufacturing industry.
Fluctuations in Raw Material Prices Pose a Threat
Volatility in prices of key raw materials like iron ore and scrap steel poses a threat to the stable supply and cost control of free machining steel production. Free machining steel grades derive their machinability properties from alloying elements such as sulfur, phosphorous, and lead which makes the input material costs prone to fluctuations. Any abrupt rise in the prices of base metal alloys can squeeze the margins of steel manufacturers. The ongoing global supply chain disruptions due to pandemics and geopolitical issues have contributed to high raw material procurement challenges for steel mills. Unpredictable raw material prices in the long run may negatively impact the profitability of free machining steel producers.
Dependence on Few Import Markets Hampers Business Growth
Free machining steel market players are highly reliant on a small number of import markets for generating majority of their revenue. However, these crucial markets are often impacted by changes in trade policies, local content laws, and import tariffs imposed by their governments. Issues like the U.S.-China trade war and Brexit have affected free trade between nations in the past. Such import restrictions on foreign steel products in key consumer regions such as Asia Pacific can constrain the sales and expansion plans of export-oriented free machining steel manufacturers.
Electronic Industry’s Emergence as New Demand Sector
The rising production of electronics and electrical products worldwide has opened new grounds of opportunity for the free machining steel market. Free machining variants are increasingly replacing aluminum and brass sheets in the fabrication of electrical component enclosure boxes, chassis and casings due to their cost benefits and easier formability. This anticipated boom in the electronics manufacturing arena will stimulate the adoption of free machining steel solutions for housings and stamped metal parts.
Growth of 3D Printing Creates Novel Application Avenues
Advancements in 3D printing technology have enabled manufacturing of complex metal parts layer-by-layer using feedstock material in powdered form. Free machining steel powder is emerging as a promising feedstock for 3D printing of functional metal components using techniques like laser powder bed fusion and binder jetting. Free machining steel powder blends provide attributes like shape retaining ability and corrosion resistance required for functional 3D printed parts.
Link - https://www.coherentmarketinsights.com/market-insight/free-machining-steel-market-5368
Key Developments:
- In December 2023, Nippon Steel Corporation revealed its intention to acquire United States Steel Corporation in a deal valued at US$ 14.1 billion, aiming to bolster its international presence. The agreement included provisions to keep the latter's headquarters in Pittsburgh and uphold current union agreements. However, the proposed merger encountered resistance from U.S. lawmakers and labor unions, citing concerns over national security. As of December 2024, Nippon Steel remains determined to complete the acquisition, targeting closure by the end of the year.
Key Players:
ArcelorMittal, Nippon Steel Corporation, POSCO, Tata Steel, JFE Steel Corporation, Thyssenkrupp AG, Nucor Corporation, Gerdau S.A., Baosteel Group, Hyundai Steel, Voestalpine AG, SSAB AB, and United States Steel Corporation
