High-Speed Steels Market

Market Overview

The global high-speed steels market size was valued at USD 6.3 billion in 2022 and is projected to reach a value of USD 11.1 billion by 2031, registering a CAGR of 6.5% during the forecast period (2023-2031). End-use sectors, such as automotive and construction, drive the high-speed steels market share.

High-speed steels (HSS) are a type of tool steel noted for its superior cutting capability, hardness, and ability to retain qualities at high temperatures. They are frequently utilized in machining and cutting tool applications requiring high wear resistance, hardness, and toughness. The increasing demand for high-speed steel in the aerospace and energy sectors is projected to fuel the high-speed steel markets growth. Demand for high-speed steel is expected to rise as the aircraft sector expands and modernizes, propelling market growth. Electricity generation, oil and gas exploration, and renewable energy are all parts of the energy sector. These industries demand cutting tools and machining components that withstand extreme drilling, machining, and processing conditions.

High-speed steel is utilized in drilling tools, cutting tools, turbine components, and other critical parts in the energy sector because of its superior heat resistance, hardness, and wear resistance. Growing worldwide energy consumption and a higher emphasis on renewable energy projects are expected to drive the high-speed steel markets growth. However, fluctuations in raw material prices and the increasing use of carbide-cutting tools in various end-use industries will likely limit the industry's growth throughout the projection years.

Market Dynamics

Global High-Speed Steels Market Drivers:

Rising Demand in the Automotive and Aerospace Industries

Due to the necessity for precision machining, cutting, and forming materials in producing vehicle components and aircraft parts, the automotive and aerospace industries are critical consumers of high-speed steels. The expansion of these industries, fueled by technological improvements and rising demand for vehicles and aircraft, dramatically adds to the demand for high-speed steels. The expansion and technical improvements in the automotive and aerospace industries directly impact the demand for high-speed steels. As these industries progress, introducing new materials and designs in cars and aircraft, the demand for cutting-edge machining tools manufactured of high-speed steels remains high. As aircraft designs improve to incorporate lightweight materials and sophisticated alloys, there is a more significant requirement for cutting tools capable of handling these materials, fuelling demand for high-speed steels.

Moreover, high-speed steels are widely utilized in the automobile industry to manufacture precision cutting tools for machining engine components, transmission parts, and other vital elements. Total automotive production in 2023 is expected to be at 81.6 million. The International Organization of Motor Vehicle Manufacturers (OICA) further classified total vehicle production in 2022 by country. China led the way with 26.1 million vehicles, followed by the United States and Japan. As a result, the high-speed steel market trend is influenced during the forecast period.

Global High-Speed Steels Market Restraints:

Fluctuating Raw Material Prices

Alloying elements in high-speed steels include tungsten, molybdenum, and vanadium, and the prices of these raw materials might fluctuate. Raw material price volatility can impact high-speed steel production costs, influencing the cost of manufacturing cutting tools and market dynamics. Various variables, including market speculation and price manipulation, can affect tungsten prices. Due to the decreasing demand, the prices of most tungsten concentrates and downstream tungsten materials fell in March and April 2020. Prices then steadied or gradually increased as the year progressed. In 2022, the average tungsten price was roughly USD 270 per metric ton unit of tungsten trioxide, a 20% rise over the previous year. According to the USGS, the average price of tungsten in 2020 will be roughly USD 250 per metric ton unit (MTU). Tungsten prices, on the other hand, can vary dramatically depending on market conditions. For example, geopolitical tensions or interruptions in tungsten-producing regions might cause price surges.

Similarly, over the last decade, molybdenum prices have ranged mainly between USD 5 and USD 15 per pound, but by 2021, the price has risen to more than USD 20.00 per pound. In addition, the predicted average Chinese vanadium pentoxide price in 2021 increased by 22% above the price in 2020. Compared to 2020, the expected US ferrovanadium price increased by 51% to USD 16.30 per pound in 2021. Raw material price fluctuations need strategic considerations for high-speed steel makers. Certain businesses may adopt hedging tactics or long-term supply agreements to offset the impact of price volatility.

Global High-Speed Steels Market Opportunity:

Growing Renewable Energy Sector

High-speed steels have substantial prospects in the renewable energy sector, particularly wind and solar energy. These steels are critical in producing precision components for renewable energy systems such as wind turbines. Precision machining is required to provide long-lasting and efficient components that survive the rigorous operating conditions in renewable energy applications. High-speed steels are widely used to machinate important wind turbine components such as gears, shafts, and bearings. Precision machining is required for these components to ensure smooth operation and reliability. According to the 2023 Global Wind Report from the Global Wind Energy Council (GWEC), the world's installed wind power capacity will be 906 gigatonnes (GW) in 2022. This represents a 9% increase over 2021. As the wind energy industry grows, so does the demand for high-speed steel tools to manufacture wind turbine components.

Additionally, governments and enterprises worldwide investing in renewable energy projects constantly demand high-speed steel equipment to manufacture and maintain renewable energy infrastructure. The International Energy Agency (IEA) estimates that global renewable capacity additions in 2022 will be over 340 GW, making 2022 a record year for renewable electricity capacity increases. This represents a 295 GW increase over 2021, and renewable capacity has exceeded 300 GW for the first time. This significant investment in renewable energy projects adds to the need for high-speed steels used in component manufacturing. Finally, expanding the renewable energy sector gives a substantial opportunity for high-speed steels. Precision machining needs for wind turbines and solar panels and increased investment in renewable energy projects drive demand for high-speed steel equipment.

Regional Analysis

The global high-speed steels markets analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global high-speed steels market shareholder and is estimated to grow at a CAGR of 6.4% over the forecast period. The region's rapid economic development and rising investments in high-speed steel by various governments and prominent industrial players are expected to boost regional market expansion. Furthermore, increasing middle-class salaries in the region stimulate demand for multiple commodities, supporting the development of several North American industries. As a result, industrialization in the region continues, bolstering the growth of the North American high-speed steel industry. The increased fabrication and building projects in the United States also fuel regional market expansion.

One of the primary drivers of HSS market growth is the established industrial sector in the United States. The United States is one of the world's largest markets for industrial equipment, making it a valuable market for HSS tool manufacturers. Furthermore, key end-use industries in the US, including automotive and transportation, oil and gas, and construction, are expected to drive HSS market expansion.

Asia-Pacific is anticipated to exhibit a CAGR of 6.6% over the forecast period. According to high-speed steels market insights, the construction industry in Asia is the largest steel user, and it is likely to grow significantly during the forecast period. The construction sector accounts for about two-thirds of all steel consumption in Asian countries, a promising indicator for the fast-growing steel market. The automotive industry is one of the country's most important manufacturing sectors. China manufactures more than half of the vehicles in the Asia-Pacific area. As a growing country, China's expanding infrastructure development spending will increase demand for HSS.

The European high-speed steels market is important to the region's industrial environment. Ongoing developments in advanced manufacturing, sustainability, customization, and digital integration shape the market's dynamics. Economic risks are offset by opportunities created by infrastructural development and regional industry growth.

Segmental Analysis

The global high-speed steels market is segmented based on type, production method, grade, end-user, and region.

The market is further segmented by Type into Tungsten High-Speed Steel, Molybdenum High-Speed Steel, and Cobalt High-Speed Steel.

Molybdenum High-Speed Steel is a significant contributor to the market. Molybdenum is a crucial alloying element in molybdenum high-speed steel. Molybdenum improves the strength, hardness, and heat resistance of steel. It is frequently combined with other components to obtain a balance of characteristics suited for various machining applications. In 2022, the molybdenum high-speed steel sub-segment led the market. Molybdenum high-speed steel (HSS) is a type of high-speed steel that incorporates molybdenum as an alloying element. Molybdenum helps increase the strength and hardness of steel at high temperatures. Molybdenum HSS retains its performance and hardness even at high temperatures, making it ideal for high-speed machining, cutting, and drilling applications.

Molybdenum high-speed steel offers excellent wear resistance, which is essential for tools used in high-speed cutting or machining processes. Molybdenum HSS's combination of high hardness, red hardness, and wear resistance helps it retain its sharpness and cutting performance for longer, leading to increased tool life and productivity. These reasons are expected to fuel the molybdenum high-speed steel sub-segment expansion.

Tungsten high-speed steel, commonly known as tool steel, has a high tungsten content as the primary alloying element. Tungsten contributes to steel's hardness and wear resistance, making it well-suited for applications needing long-lasting cutting tools. Tungsten high-speed steel has high hardness, heat resistance, and abrasion resistance. This type of high-speed steel is frequently used in applications requiring high-speed machining and cutting.

Based on production method, the market is sub-segmented into Conventional HSS, Powder Metallurgy (PM) HSS, and Spray Forming (SF) HSS.

Powder Metallurgy (PM) HSS commands the most share of the market. Powder metallurgy is compacting and sintering metal powders to produce high-speed steel. This method provides exact control over the alloy composition, increasing uniformity and the capacity to add alloying components more efficiently. In 2022, the powder metallurgy (PM) HSS sub-segment led the worldwide market for high-speed steels . Compared to conventional steel formation processes, the powder-produced steel formation process generates a homogeneous microstructure with a finer, more uniform carbide dispersion, resulting in improved dimensional stability, grind ability, and toughness. This technology also allows for the production of more highly alloyed grades, which would be impossible to produce using standard steelmaking procedures. It is increasingly used as a tooling material for mechanical and CNC applications. It is suitable for various grinding users except for procedures involving high-temperature alloys and exotics.

Traditional ways of producing conventional HSS include ingot casting and forging. Melting and casting the alloy is followed by hot working to shape the material into desired shapes, such as bars, sheets, or billets. For many years, conventional HSS production processes have been widely used. The resulting material, typical of high-speed steels, has excellent hardness, wear, and heat resistance. Conventional HSS is used in various cutting tools, drills, taps, and other applications requiring high-speed machining and durability.

Based on grade, the market is fragmented into M Grade, T Grade, and Advance Grade.

M Grade generates the most revenue. M Grade high-speed steels are well-known for their versatility in machining. They are appropriate for various cutting tools and machining applications due to their balance of hardness, toughness, and wear resistance. In 2022, the M-grade sub-segment dominated the worldwide high-speed steel markets share. The tungsten concentration in the M series alloys is lower (between 1.25% and 10%). With a lower atomic weight, this element offers many of the same advantages as tungsten. It possesses less hot hardness because of its lower melting point. The M series is the best choice for most tooling applications. These steels are M2, M3, M4, M7, and M42. These elements are expected to promote sub-segment growth in the coming years.

T Grade high-speed steels are intended to perform well in applications requiring strong wear resistance and hot hardness. They are well-known for retaining hardness at high temperatures, making them ideal for high-speed machining. T Grade high-speed steels are frequently chosen for cutting tools in demanding applications, such as milling cutters and high-temperature machining processes.

The market can be further bifurcated by end-users into Automotive, Manufacturing, Aerospace, Mechanical Engineering, and Construction.

Automotive is the major end-user of the market. High-speed steels are essential for producing various cutting tools and components in the automotive industry. This comprises the manufacture of drills, taps, milling cutters, and other tools used to create automobile parts and components. In 2022, the automotive sub-segment dominated worldwide high-speed steels. High-speed steel-cutting tools are increasingly being used to manufacture vehicle components. The most generally used tools for tightening fasteners, engine mounting, and other joint repairs are drills and fastening tools. Sanders and angle grinders smooth and polish the automotive parts and chassis. With the global electric vehicle sector growing at roughly 60% per year, more manufacturing facilities and expansion are projected to increase demand for cutting tools. This may be more noticeable in countries such as China, Japan, the United States, and Western Europe, where EV production is predicted to accelerate during the forecast period.

Manufacturing is a broad category that includes a variety of sectors, such as general machinery manufacturing, metalworking, and tool fabrication. High-speed steels are widely used to produce cutting tools, dies, and molds for various purposes. High-speed steels are a popular choice for manufacturers who demand adaptable and robust tools that can handle a variety of materials and machining techniques.

Recent Developments

• November 2023- ArcelorMittal entered the additive manufacturing business as a supplier of steel powder.
• October 2023- NHSRCL completed the construction of the first steel bridge for the Mumbai-Ahmedabad High-Speed Rail Corridor.