Growing demand for Hi-Lite grade electrical steel in high-speed motors of lower magnetic losses and increase the mechanical strength is expected to augment the market growth of the electrical steel. Moreover, Hi-Lite grade electrical steel also provides a 6% improvement in terms of torque. Moreover, growth in automotive production around the globe is further expected to augment the market growth of electrical steel.
The growing use of amorphous metal alloys due to its higher amorphous metal alloys than electrical steel is projected to restrict the market growth. It is widely used in place of grain-oriented electrical steel to reduce the core loss of the transformers by 75%. It also helps to reduce the noise and temperature in the core materials for transformers. This is projected to restrict the market growth of electrical steel.
Asia Pacific dominated the global electrical steel market and accounted for a share of 52.4% in 2019, followed by Europe and North America respectively. This is attributed to growing demand for electricity in developing countries such as Indonesia, India and Vietnam. According to India Brand Equity Foundation (IBEF), in 2018, India was the third largest producer and consumer of electricity, globally. Furthermore, the country has fifth largest installed capacity in the world, according to the same source.
Among applications, motors dominated the global electrical steel market in 2019 and accounted for 67.0% of market share in terms of value, followed by transformers and inductors, respectively. The recent past has witnessed rising adoption of electric vehicles as they are an eco-friendly option, are cost effective. Such vehicles integrate a higher number of automotive motors and thus, growing demand for such motors is expected to fuel growth of this segment. According to the International Energy Agency (IEA) report In the Paris Agreement, it was stated that 600 million electric vehicles will be on roads by 2040, which will aid in bringing global warming to below 2°C”. Furthermore, in 2018, the global electric vehicles sales exceeded 5.1 million, which was an increase of 2 million from 2017, and double the number of new electric car sales compared to 2017.
Product innovation by key players to expand the product portfolio is one of the major trends in the market and this ongoing trend is expected to foster the market growth of electrical steel. For instance, in May 2018, AK Steel has announced the launch of a new electrical steels for use in high-voltage and ultra-voltage power transformers. The new range of products is expected to help power transformer manufacturers to bring about significant improvement in overall efficiencies in their products.
Strategic alliance partnership by major players for expanding footprints around the globe is expected to accelerate the market growth of electrical steel. For instance, in July 2019, NLMK Group has signed a long-term strategic partnership agreement with LTC Group, a European manufacturer of components for transformers and power generation devices. Under this agreement, NLMK Group companies in Lipetsk and Yekaterinburg is going to supply grain-oriented and non-grain-oriented electrical steel and provide technical support to LTC Group.
Global Electrical Steel Market - Impact of Coronavirus (Covid-19) Pandemic
The Covid-19 pandemic has impacted the electric steel market owing to decreasing steel production and automotive industry. According to World Steel Association, estimated a decrease of world crude steel production to 13% in April 2020 compared to April 2019. However, the electrical steel market is expected to stabilize the growth of the market after the first quarter 2021.