Global Statistics Representing Electrical Steel Market Scenario
Electrical steel, also known as laminate or silicon steel, is an iron alloy molded to produce specific magnetic properties. Electrical steel is majorly used in the manufacture of cores for power transformers, generators, and inductors, among others, owing to its high permeability, which fortifies low core loss in electrical components.
Growing urban population and electricity demand from residential and commercial sectors are expected to propel the demand for electrical steel. In addition, various government and non-government organizations have been taking initiatives for the electrification of underprivileged villages, which is anticipated to positively impact the global electrical steel market.
According to the statistical facts provided by International Energy Agency, 650 million individuals live without electricity in Indian rural areas and two-thirds of Sub-Sharan Africa's population does not have access to power and the remaining population is unable to consume electricity due to structural problems in the electrical system. This scenario of electrification in such areas reflects the growth potential in the electric steel market.
The global electrical steel market was valued at USD 20.45 billion in 2018 and is expected to reach a value of USD 34.63 billion at a CAGR of 5.8% during the forecast period, 2019–2026.
The global electrical steel market has been segmented on the basis of type, application, and end-use industry.
By type, the electrical steel market has been segmented into grain oriented and non-grain oriented. The grain-oriented electrical steel segment is expected to grow with the highest CAGR, largely owing to the various applications of this type of electric steel in electrical devices such as energy-efficient transformers, and large and high-performance generators. Increasing demand for transformers, generators, and regulators from commercial and non-commercial sectors is expected to propel the growth of the electric steel market.
By application, the electrical steel market has been segmented into inductors, motors, transformers, and others. The electrical motor segment has been registering exponential growth and is expected to contribute the largest share in the global electrical steel market during the assessment period, 2019–2026. In the manufacturing industry, rotating machines convert electrical energy into mechanical energy for industrial work. Following statistical information will intensify the existing and potential demand motor. Global IHP (Indicated Horse Power motor) market was valued at USD 29.8 million in 2016 and it is anticipated to reach USD 36.5 million by 2019, at CAGR of 6.8 %, according to Vibrant Gujarat, global summit 2017 which is regulated by the government of India.
By end-use industry, the electrical steel market has been segmented into household appliances, manufacturing, energy, automotive and others. Household appliances are major consumers of electrical motors and thus, the increasing demand for electrical household appliances is likely to drive the global electric steel market during the projected period, 2019–2026. According to ZVEI – German Electrical and Electronic Manufacturers' Association, the global production of the electrical and electronic industry was pegged at USD 4506.11 billion in 2016 and it is projected to reach USD 5195.01 million in 2019.
Geographically, the global electrical steel market has been segmented into five regions, namely North America, Europe, Asia Pacific, and Latin America and the Middle East & Africa (LAMEA).
Asia Pacific is expected to lead the global electric steel market, owing to rapid industrialization and growing production of electricity in the region. According to a report published by Indian Brand Equity Foundation in 2018, India is the world's third largest producer and fourth largest consumer of electricity in the world. In addition, India's power sector is projected to attract investments worth of USD 179.31 billion between 2017 and 2022.
Europe is anticipated to gain significant traction in the global electric steel market during forecast period, 2019–2026, owing to the region’s growing automobile industry and emerging electric vehicle market segment. Cost and fuel efficiency, recyclability and formability are rapidly emerging as key focus areas in the automotive sector and as a result, material and component selection are more important than ever before. According to facts shared by Tata Steel, a part of Tata group, increasing demand for ultra-low emission vehicles or electric vehicles will accelerate the demand for advanced electrical and plated steel in the European automotive industry and this demand for vehicles is projected to increase by 2.6 million tonnes by 2050.
North America is expected to hold a significant share in the global electric steel market, owing to the increasing production of electrical and electronic appliances where electric steel plays a major role. Advancement in electrical appliances and machines and their rapid adoption are collectively driving the market in the region. According to the German Electrical and Electronic Manufacturers Association, the electrical & electronic industry in North America was valued at USD 527.02 billion and it is projected to reach USD 548.10 billion by end of 2019.
Latin America is expected to witness notable growth in the electrical steel market during the forecast period, owing to the increasing vehicle production in the region and the mushrooming production facilities of automotive manufacturers in Argentina and Mexico. According to Mexican Automobile Industry Association, Mexico is the seventh largest producer of cars and the fourth largest exporter for the automotive industry after Germany, Japan and South Korea. In addition, in 2015, Mexico's exports to the United States was 70%, Canada (1.8%), Germany (2.6%), Brazil (2.4%), Colombia (2.1%), China (2%), Saudi Arabia (1.3%), Argentina (0.9%) and Italy (0.5%) other (16.4%).
The Middle East and Africa region is slated to witness sluggish growth in the electrical steel market due to the relatively slow rate of technological advancement in the region.
Some of the key players in the global electrical steel market are Nippon Steel & Sumitomo Metal Corporation (Japan), POSCO (South Korea), Baosteel (China), China Baowu Steel Group Corporation Limited, Ansteel Group Corporation Limited, United States Steel Corporation (U.S.), ArcelorMittal (Luxembourg), Tata Steel Limited (India), SAIL (Steel Authority of India Limited)(India), Voestalpine Group (Austria), Baosteel Group (Baowu Steel Group Corporation Limited), Jindal Steel and Power Limited (India), JFE Steel Corporation (India) and Essar Steel (India).
Electrical Steel Market Segmentation
By End-Use Industry