Electrical Steel Market to Surge at 8.5% CAGR, Valued at US$ 69.4 Billion by 2034

The electrical steel market is expected to grow at a CAGR of 8.5% and reach a value of US$ 69.4 billion by late 2034. Silicon steel, another name for electrical steel, is a specific alloy used in electric motors and transformers, among other electrical appliances. Its high magnetic permeability minimises energy losses during operation by enabling effective magnetic flux conduction. since of its low core losses and hysteresis losses, steel has a high energy efficiency since it dissipates less heat.

The growth of the electrical steel market is fueled by increasing demand across industries for motors and energy-efficient transformers. There is a growing preference for sustainable energy solutions, driven by the rise in electric vehicles and renewable energy infrastructure projects. Electric steel, renowned for its effective magnetic properties essential for efficient power transmission, is thus witnessing heightened demand.

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However, the electrical steel market encounters several challenges that hinder its expansion. The production of electric steel involves costly processes such as annealing and coating, which require substantial capital investment. Additionally, stringent environmental regulations and fluctuating prices of raw materials pose further constraints on market growth during the forecast period. These factors collectively impact the industry's trajectory, necessitating strategic approaches to navigate challenges and sustain growth in the dynamic market landscape.

Key Takeaways

Europe is poised to see significant demand growth for electrical steel, largely driven by the increasing adoption of electric vehicles. The well-established electric vehicle market in Germany and the rising deployment of data centers are major contributors to this trend. Meanwhile, Asia Pacific, led by countries like India and China, is expected to experience rapid expansion in the electrical steel industry. Rising personal incomes and shifting lifestyle preferences in these regions have spurred a surge in demand for electric vehicles, further bolstering the market.

Grain-oriented steel, renowned for its high permeability and low energy loss characteristics due to its 3% silicon content, remains in high demand globally. The market for non-grain-oriented electrical steel casings has also grown significantly, particularly driven by the development of efficient hybrid electric vehicles that utilize these materials. These trends underscore the evolving dynamics and growing importance of electrical steel in the automotive and energy sectors worldwide.

List of Key Companies Profiled in The Report

Novolipetsk Steel
Voestalpine Stahl GmbH
POSCO
Nippon Steel
Sumitomo Metal Corporation
ThyssenKrupp AG
JFE Steel Corporation
Cogent Power
ArcelorMittal SA
Aperam SA
Baosteel Group
AK Steel Holding Corp
Others

Driving Forces of the Electrical Steel Market

The demand for electricity, driven by industrialization and urbanization, is a key driver of the electrical steel market. Known for its consistent magnetic properties and high permeability, electrical steel plays a crucial role in transformers, motors, and other electromagnetic devices. Additionally, the burgeoning electric vehicles (EVs) industry is increasing the demand for efficient electric motors, thus boosting the use of electrical steel. Despite challenges such as high raw material costs, technological advancements and increasing applications in the power sector are expected to propel significant market growth from 2024 to 2034.

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Market Competition and Strategic Initiatives

Leading companies in the electrical steel market are increasingly adopting environmentally friendly materials and focusing on product development aligned with local safety regulations. Key players include ArcelorMittal, Tata Steel Limited, SAIL (Steel Authority of India Limited), Voestalpine Group, Baosteel Group (Baowu Steel Group Corporation Limited), Jindal Steel and Power Limited, JFE Steel Corporation, and Essar Steel.

In April 2022, POSCO commenced the construction of a new electrical steel production facility, committing an investment of $805 million. This initiative aims to establish an annual production capacity of 300,000 tons of Non-Oriented Electrical Steel (NOES), underscoring POSCO's strategic expansion in the global market.

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This release was published on openPR.