The electrical steel market is presently witnessing a slump during the COVID-19 outbreak. Temporary closure of mining facilities, and restrictions on international trade are expected to hinder market activity in the short term. Also, the severe impact of COVID-19 on China, one of the largest steel producers will hurt the market.
The electrical steel market is expected to rise at a 8% CAGR through the projection period (2019 – 2029). Strong demand for electric vehicles in addition to infrastructural and utilities development projects will assist in the recovery of the industry once the pandemic subsides, reveals the Fact.MR report.
“The wide scope of electric steel applications in the automotive industry and high-power consumer appliances including commercial refrigerators, air conditioners, power coolers, will support the growth of the market. Consumer appliance OEMs are researching the use of electrical steel in the products to mitigate the environmental impact of regular steel. Such developments enable low energy costs with high performance, strongly driving sales once the pandemic restrictions are lifted,” says the FACT.MR analyst.
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Electrical Steel Market – Major Takeaways
- Grain oriented electrical steel will witness rapid growth in the projection period driven by applications in power generators and transformers.
- Automotive applications of electrical steel will rise strongly with the positive prospects of the electric vehicle industry in the near future.
- End use of electrical steel in household appliances such as washing machines and refrigerators will witness substantial gains, supported by recyclable and corrosion resistance characteristics.
- North America will hold a dominant position in the electrical steel industry, owing to sales of electric vehicles and widespread urbanization. Asia Pacific will display remunerative opportunities, especially in China and India aided by development in construction and infrastructure sectors.
Electrical Steel Market – Top Driving Factors
- High levels of investment in infrastructure development and the prevalence of urban areas aid market growth.
- Extensive application of electrical steel in consumer appliances, coupled with growth in disposable income contributes substantially to revenue.
- Government regulations towards energy efficiency in power transformers and minimal carbon emissions will also support the adoption of electrical steel.
- Strong demand for electrical automobiles and the use of electrical steel in motor components will bolster market developments.
Electrical Steel Market – Key Constraints
- Mechanical stress on electrical steel during bending, cutting, and punching processes impact the performance of the material, limiting end use applications.
- Products using electrical steel face a number of safety and tech constraints, in terms of efficiency and precision, which will hamper the market.
Anticipated Impact on Market by COVID-19 Outbreak
The mining sector has been a key area of focus during the COVID-19 pandemic. Temporary closure of facilities has impacted supplies of raw materials in the electrical steel industry. Operations are expected to start recovering towards the end of 2020, as workers return to operations.
The temporary shutdown of infrastructure, consumer goods, and automotive industry facilities will impact the demand for electric steel in the short term. Further, the pandemic has also impacted the gradual recovery in the industry which was exacerbated after the tariff wars between China and the United States. The recovery of the electrical steel industry is dependent on how fast the outbreak is brought under control.
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Dominant players in the electrical steel market include but are not limited to United States Steel Corporation, ArcelorMittal, ThyssenKrupp AG, Ansteel Group Corporation Ltd., Tata Steel, Nippon Steel, and POSCO. These players are investing in the expansion of the production capabilities.
For instance, Tata Steel is moving ahead with the expansion of the facility in Odisha, India for production of 8 mtpa. Similarly, Singapore based Esteel is expanding on production with the purchase of Antara Steel Mills from Amsteel.
More About the Report
The FACT.MR’s market research report gives exhaustive insights on electrical steel market. The market is analyzed in terms of product (grain-oriented electrical steel, non-grain oriented electrical steel), application (inductors, transformers, and motors) and end use industry (automobile, energy, household appliance, manufacturing, and others) across six key regions (North America, Latin America, Europe, East Asia, South Asia & Oceania, and Middle East and Africa).