Electrical steel, also known as silicon steel, lamination steel, or oriented silicon steel, is a type of steel with superior magnetic properties that makes it ideal for applications requiring efficient electromagnetic devices. It is most commonly used in transformer cores, electric motors, and inductors in power generation, transmission and industrial motors. From renewable energy equipment like wind turbines and solar inverters to electric vehicles, electrical steel serves as the backbone for equipment powering the green energy transition.

The global electrical steel market is estimated to be valued at US$ 43.97 Bn in 2023 and is expected to exhibit a CAGR of 8.6% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Increasing Demand from Energy Sectors: Rapid industrialization and infrastructure development have boosted the demand for efficient power transmission equipment like transformers. Moreover, rising renewable energy capacity additions and investments in smart grids are expected to drive the demand for electrical steel from power generation and transmission sectors over the coming years.

The growth of the Global Electrical Steel Market Size is predominantly driven by increasing demand from energy sectors like power generation, transmission and distribution networks. Electical steel is a vital component used in equipment like transformers, electric motors and inductors which aid in efficient transmission and distribution of electricity. Rapid industrialization and infrastructure growth have significantly increased the demand for power transmission equipment worldwide. Additionally, ongoing investments in renewable energy expansion and modernization of aging power grids are also augmenting the consumption of electrical steel. The market is thus estimated to witness substantial growth over the forecast period.

SWOT Analysis

Strength: Electrical steel has high magnetic permeability which makes it suitable for transformer cores and motors. It has low electrical resistance and high saturation point allowing efficient magnetic circuits. Manufacturers are developing advanced steel grades with lower core losses to improve energy efficiency.

Weakness: Electrical steel manufacturing requires capital intensive production facilities. Raw material prices especially of iron ore are vulnerable to global commodity price fluctuations. The industry is highly competitive with low-margins.

Opportunity: Growing adoption of renewable energy and electric vehicles will drive demand for electrical steel in wind turbine generators, solar inverters, and traction motors. Utilities are replacing aging power infrastructure offering opportunities. Developing countries are investing in electric power networks to meet rising energy needs.

Threats: Technological advances may reduce dependency on electrical steel in future electric power systems. Novel magnetic materials combined with 3D printing could disrupt conventional manufacturing. Trade disputes and tariffs impact sourcing and global supply chains.

Key Takeaways

The global electrical steel market is expected to witness high growth over the forecast period driven by expanding renewable energy generation and electric vehicle adoption. The electrical steel market size for 2024 is estimated at US$ 43.97 Mn and is projected to grow at a CAGR of 8.6% through 2031.

Regional analysis: Asia Pacific currently dominates the global electrical steel market owing to the large manufacturing base in China, Japan, and South Korea. Countries like China and India are rapidly increasing investments in electrical infrastructure and renewable energy to meet rising energy demand from economic growth and development. The region is forecast to maintain its leadership through 2031.

Key players: Key players operating in the electrical steel market include Yara International ASA, The Mosaic Company, Nutrien Ltd., BASF SE and Agrium Inc. (acquired by Nutrien). These companies are focused on developing advanced steel grades and establishing global supply chain networks to tap opportunities in emerging markets. Consolidation within the industry is expected to continue with larger players acquiring smaller competitors.

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