Global Tool Steel Market to Grow at a CAGR of 5.3% by 2030

Introduction

Tool steels are members of the carbon steel family and are ideally suited for tool fabrication. Four carbide-forming components comprise tool steels: tungsten, chromium, vanadium, and molybdenum. These components improve the tool steel's heat resistance, hardness, and durability. The addition of cobalt or nickel to tool steels increases their high-temperature performance. There are six basic categories for tool steels: water-hardening, cold-working, hot-working, shock resistance, high-strength, and special-purpose.

Cost-effectiveness, surface hardness, strength, working temperature, shock resistance, and toughness are among the characteristics that influence the selection of tool steels. Metals are cut, pressed, extruded, stamped, formed, sheared, and formed utilizing tool steel. In addition, injection molds are created from tool steels because of the material's outstanding abrasion resistance. Technological advancements in the industrial manufacturing sector, such as advanced heating technologies supported by strict government regulation of the use of automated heating technologies for manufacturing, particularly in North America and Europe, have dramatically increased the demand for tool steel, which fuel the market growth.

Market Dynamics

Government Investments in Building and Construction Activities to Drive the Global Tool Steel Market

Government initiatives contribute significantly to a nation's export competitiveness and self-sufficiency. Population expansion in emerging economies has resulted in mass migration, putting a tremendous strain on the urban infrastructure as it currently exists. To combat this, governments have begun giving soft loans to encourage investment and FDI in their respective nations' construction and manufacturing sectors. As tool steel is widely utilized in construction through hand tools, pneumatic tools, and automotive parts of vehicles used in construction, the global demand for tool steel is driven by increasing government investments and the rising need for building and construction. Infrastructure is the key to a nation's economic growth. The infrastructure industry is vital to the nation's economic growth.

Governments worldwide play an active part in fostering business growth by enacting favorable legislation and adopting policies that ensure timely infrastructure development. Significant investments in infrastructure projects have driven total assets, resulting in a meteoric expansion of the global tool steel industry. Technological advancements in the industrial manufacturing sector, such as advanced heating technologies supported by strict government regulation of the use of automated heating technologies for manufacturing, particularly in North America and Europe, have dramatically increased the demand for tool steel, which is anticipated to fuel the growth of the tool steel market.

Increasing Demand for Tool Steel in Industrially Revolutionizing Economies to Provide Opportunities for theGlobal Tool Steel Market

Emerging economies are typically late adopters of innovation and technology. Rapid industrialization and urbanization have increased the demand for efficient, cost-effective, and timely construction processes, electronic products, energy, and transportation options, compelling the manufacturing sector to shift its emphasis to the modernization of equipment and the simplification of work. Every stage of production, from industrial to food, requires tool steel.

Increasing government subsidies in industrially transforming regions such as Asia-Pacific and South America have led to a resurgence of investments in manufacturing and other industrial sectors to supply the growing population's demand for goods. This has created an opportunity for the global tool steel market due to the ever-increasing demand for tool steel.

Regional Insights

By region, the global tool steel market is segmented into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific dominated the market and is estimated to register a CAGR of 5% during the forecast period. Due to its population and growth rate, Asia-Pacific has the fastest-growing automotive manufacturing and real estate sectors, with a high demand for passenger vehicles, HCVs, and LCVs. As the number of automobiles in Asia-Pacific increases, the need for HCVs and LCVs also rises. Due to numerous passenger car, HCV, and LCV manufacturers, Asia-Pacific is the world's largest producer of automobiles and associated raw materials and finished goods. Countries in Asia-Pacific, such as China and India, are at the forefront of investment in the renewable energy sector, hence generating demand for HCVs and LCVs in the construction industry and the Asia-Pacific tool steel market. Increasing emphasis on new infrastructure construction and the reconstruction of aging assets promotes construction spending in these economies. India and China's construction sectors contributed around 26.49% and 40.54%, respectively, to the world GDP, which is greater than the global average of 25.49%. China and India are intensifying industrialization to promote exports, which has increased passenger cars, HCVs, and LCVs in these industries, enhancing tool steel demand and market expansion. The future growth of the food and packaging industry is projected to be fueled by a shift in Asia-Pacific consumer purchasing habits toward e-commerce and favorable government policies. Made in China 2025, for instance, is a ten-year national plan to transform China into a worldwide manufacturing force. It is anticipated to increase product exports from China, increasing demand for food and packaging as a marketing and customer service approach. India and China are at the forefront of product development, where several packaged food brands are introduced, bolstering the Asia-Pacific market for tool steel.

Europe is the second largest region. It is estimated to reach an expected value of USD 2085 million by 2030 at a CAGR of 3.2%. Europe is one of the technologically advanced regions. It is highly dependent on logistics fleets, passenger vehicles, heavy-duty commercial vehicles, light-duty commercial vehicles, and the overall aerospace and automotive industries to import and export raw materials and finished goods for commercial construction projects. Due to Europe's high import frequency and reliance on imports from many regions, the European economy is growing alongside the logistics industry in terms of consumption. This has raised the demand for automobiles on the European market, increasing the tool steel demand. For example, on January 26, 2016, the European Commission formed GEAR 2030, a high-level group responsible for coordinating a response to the European automobile industry's difficulties. Government measures to solve the issues faced by the automobile industry are anticipated to contribute to the expansion of the market for tool steel in Europe.

North America is the third largest region. As one of the leading automobile production hubs in the world, North America considerably contributes to the growing demand for automobiles, leading to an increase in the market for tool steel. Increased production of passenger vehicles, personal vehicles, electric vehicles, heavy-duty commercial vehicles, and light-duty commercial vehicles has increased demand for tool steel parts in the North American market. As the number of cars produced in North America continues to climb, it is anticipated that increasing income for automotive and tool steel part producers through partnership and collaboration agreements will contribute to the market's expansion. North America's logistics and product supply chain market is expanding rapidly, with new delivery vehicles, HCVs, and LCVs being added to the fleet annually. This has dramatically increased the demand for tool steel in North America.

Key Highlights

• The global steel tool market was valued at USD 5070 million in 2021. It is estimated to reach an expected value of USD 8165 million by 2030 at a CAGR of 5.3% during the forecast period (2022-2030).
• Based on product, the global tool steel market is segmented into die work, injection molding, and others. The die work segment dominated the market and is estimated to register a CAGR of 5.1% during the forecast period. 
• Based on product type, the global tool steel market is segmented into tungsten, chromium, vanadium, and others. The tungsten segment is the fastest growing and is estimated to register a CAGR of 4.8% during the forecast period.

Competitive Players

Competitive Landscape

The major companies in the global steel tool market are Voestalpine, Jacquet Metal Service, Sandvik, Fugang, Baosteel, Nachi-Fujikoshi, Hitachi High-Tech, and Universal Stainless, 

Recent Developments

Market News

• September 2022 - high-performance materials and sophisticated special forgings from voestalpine are indispensable in the aircraft models of the world’s largest manufacturers. Only recently, the High-Performance Metals Division of the voestalpine Group secured a contract extension and several new and extensive orders for the supply of heavy-duty structural parts from American airplane manufacturer Boeing. In addition, the prestigious Munich-based company MTU Aero Engines has commissioned voestalpine to supply critical forged parts over the coming years for installation in various aircraft models, including the Airbus A320neo. The total volume of orders to 2030 amounts to around three hundred million euros
• October 2022 - voestalpine is successfully expanding its position as a technology and innovation leader and has budgeted around EUR 196 million for research and development (R&D) in the current business year. The steel and technology group appreciates that R&D projects positively contribute to sustainability. Research priorities include digitalizing the production processes, developing innovative products, and converting to climate-neutral steel production.

Segmentation

Global Tool Steel Market: Segmentation

By Product

• Die Work
• Injection Molding
• Others

By Product Type

• Tungsten
• Chromium
• Vanadium
• Others

By Region

• North America
• Europe
• Asia-Pacific