April 22, 2024
Electrical Steel Market

Electrical Steel Market Is Estimated To Witness High Growth Owing To Growing Demand From Electric Vehicle Industry

Electrical steel is a type of silicon steel that is commonly used in the construction of transformer cores, motors and generators that generate electricity or convert it from one form to another. It is highly durable, corrosion-resistant and conducts magnetic fields efficiently, making it ideal for equipment that handles large electric currents and changing magnetic fields. With the rising adoption of electric vehicles and renewable energy worldwide, the demand for electrical transformers and electric motors is increasing rapidly, driving the need for electrical steel. Electrical steel possesses high magnetic permeability and low power consumption, which boosts the efficiency of equipment used in electric vehicles, wind turbines and other renewable energy infrastructure.

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 from 2024 to 2030.

Key Takeaways

Key players operating in the Electrical Steel are Yara International ASA, The Mosaic Company, Nutrien Ltd., BASF SE, Agrium Inc. (acquired by Nutrien). Electrical steel producers are investing heavily in R&D to develop advanced steel grades with higher permeability and low core loss to enable design of efficient and compact electrical equipment. Rapid expansion of automotive and renewable energy industries especially in Asia Pacific and Europe present huge opportunities for electrical steel manufacturers to strengthen their presence in these lucrative regional markets. Growing investments in ramping up the production capacities of electrical steel and establishing manufacturing facilities near key end-use industries will help key players expand their global footprint over the coming years.

Market drivers

The rising demand for electric vehicles worldwide is a key factor expected to drive the Electrical Steel Market Growth . As per the International Energy Agency (IEA), electric car stock worldwide surpassed 10 million in 2021 and is anticipated to grow over 30% annually till 2030. Since electric motors in EVs utilize cores made of electrical steel, increasing EV production and sales will significantly boost electrical steel consumption over the forecast period. Furthermore, steady growth in renewable energy capacity additions especially wind and solar is also estimated to propel the need for electrical steel as components like generators and transformers needed in wind turbines and solar parks consist of core laminations of this material.

PEST Analysis

Political: Electrical steel demand is dependent on government’s infrastructure spending and policies supporting renewable energy sector. Favorable policies boost demand and vice versa.

Economic: Growth in GDP positively impacts demand from end-use industries like construction, automotive, household appliance etc. whereas economic slowdowns adversely impact demand.

Social: Growing population and urbanization drive demand from various end-use sectors. Rising disposable incomes increase spending on goods requiring electrical steel. Environmental concerns promote renewable energy adoption increasing electrical steel consumption.

Technological: Developments in electricity distribution and emergence of hybrid/electric vehicles create new applications for grain-oriented and non-grain oriented electrical steel grades. Research in high-strength silicon steel to reduce weight and size of transformers.

Geographical regions of concentration

The Asia Pacific region accounted for the highest demand for electrical steel in 2024, in terms of value, led by China, India, Japan and other developing economies experiencing industrial growth and infrastructure development. Massive investment in power grid infrastructure and fast expanding automotive and appliance sectors support electrical steel consumption.

Fastest growing region

Africa is projected to surge ahead as the fastest growing regional market during the forecast period. This is attributable to ongoing projects to provide electricity access across many nations and drive industrialization. Power and utility industry growth paired with rising population and incomes will propel electrical steel uptake addressing continent’s development needs. Initiatives to expand renewable energy capacity utilizing technologies like wind power will further stimulate electrical steel demand.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it