Regional Breakdown of the Electrical Steel Market: Insights and Opportunities

The global electrical steel market was valued at USD 28.53 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 4.7% from 2024 to 2030. This growth is largely driven by several factors, with one of the most significant being the increasing demand for electricity generation worldwide. Electrical steel, as the name suggests, has enhanced electrical properties, including high permeability, high electrical resistivity, low hysteresis loss, and low magnetostriction. These characteristics make it highly desirable for use in applications associated with electricity consumption, distribution, and generation.

Electrical steel plays a critical role in numerous devices such as generators, electric motors, relays, solenoids, and other electromagnetic devices, all of which are integral components in power distribution systems and other related applications. For instance, in the United States, which is the second-largest electricity generator globally, the country generated approximately 4,243 TWh of electricity in 2022, marking a 6.4% increase compared to 2021. This steady increase in electricity generation further boosts the demand for electrical steel used in energy systems.

Additionally, the growing electric vehicle (EV) industry is a significant market driver for electrical steel. The material is essential in the production of rotors and stators in EV motors, where it helps enhance motor efficiency by reducing core energy losses, which in turn improves the vehicle’s range. The electric vehicle sector reached a milestone in 2022 when EV sales surpassed 10 million units, and this number is expected to rise to 17 million by the end of 2023. The increase in EV production consequently drives higher demand for electric motors, which in turn propels the consumption of electrical steel.

As the demand for electrical steel grows, manufacturers are expanding their production capacity. For example, in May 2021, JSW Steel and JFE Steel Corporation entered into a memorandum of understanding (MoU) to study the feasibility of establishing a joint venture in India to manufacture and sell electrical steel sheets in the region.

Gather more insights about the market drivers, restrains and growth of the Electrical Steel Market

Regional Insights

North America:

In 2023, North America accounted for more than 12.0% of the global electrical steel market. The region's growing focus on power generation and the electric vehicle (EV) production industry has significantly driven the demand for electrical steel. For example, in 2020, Foxconn announced plans to build EVs in North America, and by 2021, the company unveiled three EV models. In October 2023, Foxconn introduced a new model, the N electric cargo van, and further deepened its partnership with NVIDIA and ZF Group.

The expansion of the EV industry in the region has spurred investments in electric motors and charging stations, both of which are essential for EV production. For instance, Exro Technologies Inc., in April 2021, announced plans to build a 37,000-square-foot manufacturing facility in Calgary, Canada. The facility, which began operations in September 2023, is expected to produce 100,000 coil drivers annually under European automotive standards. The company’s current customers include HB4 Group and Vicinity Motor.

Europe:

Europe ranked as the second-largest regional market for electrical steel in 2023. The electric vehicle market in Europe is a key driver for the consumption of electrical steel. In 2022, the European Union saw nearly 2 million EV registrations, up from 1.74 million in 2021. The rapid expansion of the EV market has attracted foreign investments into the region.

In November 2020, Nidec announced the construction of an EV factory in Serbia to strengthen its presence in the European market and compete against Chinese players. By May 2023, Nidec had opened two new factories in Serbia, namely Nidec Electric Motor Serbia, which manufactures auto motors, and Nidec Elesys Europe, which produces inverters and electronic control units. Serbia's strategic location, with its proximity to key EV and component manufacturing hubs, has helped it become an increasingly important player in Europe’s EV market. The country is home to major automotive companies such as Bosch, Magna, ZF, Lear, Continental, Stellantis, and Yanfeng Automotive Interiors, all of which contribute to its growing prominence in the electrical steel market.

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Key Companies Market Share Insights

The electrical steel market is characterized by intense competition due to the presence of several key players with advanced technology, significant research and development (RD) activities, and a strong foothold in regional markets. These players are striving to maintain or enhance their market position by implementing various strategic initiatives. Some of the common strategies adopted by manufacturers include upgrading production plants, introducing new and improved product offerings, and expanding their regional reach to cater to an increasing demand for high-quality electrical steel products.

For example, in May 2023, Nippon Steel Corporation announced plans for the further expansion of its high-grade non-oriented electrical steel sheets. This move is aimed at enhancing the company's product portfolio and meeting the growing demand for higher-quality steel products, especially in applications like electric motors and power generation. By focusing on expanding its capacity and improving the performance of its electrical steel offerings, Nippon Steel is positioning itself to better serve industries that require superior material properties, such as electric vehicle manufacturers and companies involved in power generation.

These strategic moves, along with significant investments in RD and technological advancements, enable these companies to maintain a competitive edge in the rapidly growing electrical steel market. As the demand for more efficient and high-performance electrical steels continues to rise, particularly with the expansion of renewable energy generation and the growing electric vehicle industry, these companies are well-positioned to capitalize on the increasing opportunities in the market.

Key Electrical Steel Companies: