Powering progress with the dynamics of the electrical steel industry

April 4, 2024 6:13 pm

The global electrical steel market size was valued at US$ 25.9 billion in 2022 and expected to grow at a CAGR of 8.5% to reach US$ 55.1 billion by the end of 2032.

Electrical steel, also known as silicon steel or transformer steel, plays a crucial role in the generation, transmission, and distribution of electrical power. Its unique magnetic properties make it indispensable in the manufacturing of transformers, motors, and generators, enabling efficient energy transfer with minimal losses. The global electrical steel market has been witnessing steady growth over the years, driven by factors such as urbanization, industrialization, and the increasing demand for electricity worldwide.

Market Overview:

The electrical steel market is characterized by a complex ecosystem comprising manufacturers, suppliers, distributors, and end-users. Key market players include companies like ArcelorMittal, POSCO, Nippon Steel Corporation, and ThyssenKrupp, among others. These companies engage in strategic initiatives such as mergers and acquisitions, product innovations, and collaborations to strengthen their market position and expand their geographical presence.

Drivers of Growth:

Several factors contribute to the growth of the electrical steel market. The rising demand for electricity, driven by population growth and industrialization in emerging economies, necessitates the expansion and modernization of power infrastructure. Additionally, the shift towards renewable energy sources such as wind and solar power requires efficient power conversion and distribution systems, where electrical steel plays a vital role in manufacturing components like transformers and inverters. Furthermore, the automotive industry’s transition towards electric and hybrid vehicles increases the demand for high-efficiency electric motors, for which electrical steel is ideal due to its low core losses and high magnetic permeability. Moreover, infrastructure projects such as smart grids and high-voltage transmission lines require high-performance electrical steel for optimal energy transmission and distribution, further fueling market growth.

Challenges and Restraints:

Despite its promising growth prospects, the electrical steel market faces several challenges. Price volatility, particularly in raw material prices like silicon and steel, presents a significant hurdle for manufacturers, impacting profit margins and hindering market growth. Moreover, the energy-intensive manufacturing process of electrical steel raises environmental concerns, with stringent regulations on emissions and waste disposal posing compliance challenges for market players. Additionally, competition from substitute materials like amorphous steel and soft magnetic composites threatens the traditional electrical steel market, as these alternatives offer improved performance characteristics and energy efficiency, challenging its dominance in certain applications.

Future Outlook:

The electrical steel market is poised for steady growth in the coming years, driven by increasing investments in infrastructure, ongoing technological advancements, and the rising adoption of electric vehicles and renewable energy sources. However, market players need to address challenges related to price volatility, environmental sustainability, and technological innovation to sustain their competitive edge.

These insights are based on a report on Electrical Steel Market by Fact.MR.