Although the challenges hampering electrical steel processing have been creating a longstanding roadblock to rapid expansion of the global electrical steel market, Future Market Insights projects that the briskly growing prominence of nickel-iron alloys in the industry will continue to create an overall positive growth scenario for the electrical steel market in the near future. FMI, in its recently released intelligence outlook on the global market for electrical steel, forecasts healthy growth for the electrical steel market over the next eight years.
During 2016-2026, the global revenue of electrical steel market is anticipated to expand at a robust CAGR of 7.3% and approach a value worth US$ 38.5 Bn by the end of 2026. With over 70% value share in the global electrical steel market revenue, the non-grain oriented electrical steel type is presumed to remain a larger shareholder throughout the forecast period.
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High-permeability grain-oriented steel continues to gather momentum
Several macroeconomic factors will continue to pose a significant influence on the growth of electrical steel market, including steel industry output, purchase power parity, consumer appliances spending, power generation and distribution market, and growth of the automotive industry. Swelling demand for high-permeability-grain-oriented electrical steel intended to leverage its high permeability is specifically identified to offer a strong boost to the electrical steel market growth through 2026.
Expanding application base in Asian economies enables transformers to remain largest revenue generator
By application, transformers are expected to account for the maximum, i.e. more than 25% share of the total electrical steel market value, and are expected to maintain a higher value share in the electrical steel market throughout the projection period. This performance is prominently attributed to the rapidly strengthening economies in Southeast Asia, coupled with increasing direct investments in urbanization, rural electrification projects, and emerging industrial set-ups.
China, being the most lucrative market for electrical steel and component manufacturers, will continue to present highly attractive revenue generation opportunities to the players dealing in transformers. Moreover, Chinese economy is all set to embrace further industrialization involving new hydroelectric power stations and a range of other sustainable energy systems to meet the anticipated power requirement. FMI predicts this development to expedite the demand for electrical steel in transformer applications in China, eventually pushing the expansion of the electrical steel market in Asia Pacific (excluding Japan) over 2016-2026.
The demand for electrical steel in APEJ will continue to be on the rise in the near future, predominantly attributed to tremendous economic and infrastructural developments in the major countries within the Asian Pacific rim. Moreover, various ongoing projects such as power grid installations and capacity expansion of renewable energy installations are foreseen to further strengthen the demand for electrical steel through 2026. As indicated by regional analysis of the global electrical steel market, APEJ will continue to reign supreme globally, followed by Eastern Europe and North America, in terms of growth rate.
Increasing adoption of surface deposition technique and growing popularity of Hi-Lite steel in high speed motors to dictate market positions of manufacturers
A majority of manufacturers are harnessing diverse properties of electrical steel to enhance a wide range of applications, including high-speed supercars, consumer electronics and appliances, and a variety of GO and NGO products. Some of the latest market trends have already been adopted by leading electrical steel manufacturers such as increasing use of the surface deposition technique for increased silicon or aluminum concentration on a low silicon or aluminum substrate, and growing use of the laser treatment for curtailed core loss.
A large number of products are being patented for a variety of applications, which is expected to shape the growth of the electrical steel market in the near future. The demand for surface coatings is witnessing high traction in typical application areas, in addition to the escalating demand for Hi-Lite grade electrical steel to be used in high speed motors. Applications analysis of the electrical steel market points at an important fact that manufacturers are increasingly inclined towards patenting their electrical steel products for specific applications.
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