Grained Electrical Steel Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product Type (Conventional, High Magnetic Strength Sheets, and Domain Refinement), By Thickness (0.2 mm and Below, 0.23 mm, 0.27 mm, 0.30 mm, and 0.35 mm and Above), By Application (Transformer, Power Generator, Electric Motor, and Others), By Region, By Competition 2018-2028

Market Overview

Global Grained Electrical Steel Market has valued at USD 9.08 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 7.19% through 2028.

The Grained Electrical Steel market, also known as the grain-oriented electrical steel (GOES) market, is a specialized segment within the global steel industry that focuses on the production and distribution of a unique type of electrical steel alloy. Grained Electrical Steel possesses specific magnetic properties, characterized by a preferred orientation of its crystalline grains, which make it exceptionally suitable for various electromagnetic applications, particularly in the power generation and distribution sectors. This market primarily revolves around Grained Electrical Steel's indispensable role in the manufacturing of energy-efficient electrical transformers and generators. These components are critical for power distribution, ensuring efficient voltage regulation and minimizing energy losses during electricity transmission. Grained Electrical Steel's unique magnetic properties enable it to maintain consistent performance under varying magnetic fields and frequencies, making it an ideal choice for such applications.

The Grained Electrical Steel market is closely linked to developments in the energy sector, including the expansion of power infrastructure, the transition to renewable energy sources, and the drive for energy efficiency. It also intersects with innovations in material science and manufacturing techniques as manufacturers continually strive to improve the performance and environmental sustainability of Grained Electrical Steel products. As global energy demands evolve, the Grained Electrical Steel market remains pivotal in enhancing the efficiency and reliability of electrical systems worldwide.

Key Market Drivers

Increasing Demand for Energy-Efficient Transformers

One of the primary drivers propelling the global Grained Electrical Steel market is the escalating demand for energy-efficient transformers. Grained Electrical Steel, also known as grain-oriented electrical steel (GOES), is a vital component in the production of transformers used in the electrical distribution and transmission systems. These transformers are essential for regulating voltage levels, reducing energy losses, and ensuring the efficient transmission of electricity across long distances.

The push for energy efficiency and the reduction of greenhouse gas emissions has led to a growing need for high-performance transformers. Grained Electrical Steel possesses unique magnetic properties that allow for lower energy losses, making it the preferred choice for transformer manufacturers. As governments worldwide implement stricter energy efficiency regulations and utilities seek to upgrade their infrastructure, the demand for Grained Electrical Steel is set to increase significantly.

Expanding Power Generation and Distribution Infrastructure

The expansion of power generation and distribution infrastructure is another critical driver of the Grained Electrical Steel market. Rapid urbanization, industrialization, and the electrification of Grained Electrical Steel areas are driving the construction of new power plants, substations, and electrical grid networks. Grained Electrical Steel is essential for the core components of transformers and reactors used in these systems. Emerging economies, in particular, are witnessing substantial investments in their energy infrastructure to meet growing electricity demand. Grained Electrical Steel is integral to improving the efficiency and reliability of these systems, reducing energy losses during electricity transmission, and ensuring a stable power supply. Consequently, the global market for Grained Electrical Steel is expected to benefit from the ongoing expansion of power infrastructure.

Transition to Renewable Energy Sources

The transition to renewable energy sources is a significant driver of the Grained Electrical Steel market. Renewable energy technologies, such as wind turbines and solar inverters, rely on transformers and generators that incorporate Grained Electrical Steel to optimize energy conversion and distribution. As countries strive to reduce their dependence on fossil fuels and achieve renewable energy targets, the demand for Grained Electrical Steel in these applications is on the rise. Wind energy, in particular, relies heavily on Grained Electrical Steel in the construction of generators for wind turbines. The growth of the wind energy sector, driven by favorable government policies and environmental concerns, is contributing to the increased demand for Grained Electrical Steel globally.

Electrification of Transportation

The electrification of transportation, including electric vehicles (EVs) and high-speed trains, is emerging as a potent driver for the Grained Electrical Steel market. Grained Electrical Steel is used in the motors, inverters, and transformers that power and control electric propulsion systems in these vehicles. With the growing adoption of EVs as a means to reduce greenhouse gas emissions and dependence on fossil fuels, the demand for Grained Electrical Steel in this sector is experiencing rapid growth. Automakers are increasingly investing in electric vehicle production, and governments are offering incentives to promote EV adoption. This trend is expected to drive the demand for Grained Electrical Steel in the automotive sector, as well as in the development of charging infrastructure.

Technological Advancements in Steel Production

Technological advancements in steel production methods are positively impacting the Grained Electrical Steel market. Innovations in manufacturing processes, including improvements in grain orientation and coatings, have led to the development of high-quality Grained Electrical Steel with enhanced magnetic properties. These advancements make Grained Electrical Steel more efficient in reducing energy losses in transformers and generators. Manufacturers are investing in research and development to produce steel grades that meet the stringent requirements of modern energy systems. As new and improved Grained Electrical Steel products become available, they are expected to gain prominence in the market, further driving its growth.

Growing Investments in Grid Modernization

Growing investments in grid modernization projects aimed at enhancing the reliability and efficiency of electrical grids represent another key driver of the Grained Electrical Steel market. Aging grid infrastructure in many regions requires upgrades and refurbishments to meet the demands of a digitalized, decentralized, and renewable energy-powered future. Grained Electrical Steel is integral to these grid modernization efforts, as it helps minimize energy losses in transformers and reactors, ensuring that electricity is efficiently delivered to end-users. Utilities and grid operators are allocating significant funds to grid modernization projects, particularly in regions where infrastructure is outdated or experiencing increased stress due to changing energy dynamics.

In conclusion, the global Grained Electrical Steel market is influenced by multiple drivers, including the increasing demand for energy-efficient transformers, the expansion of power infrastructure, the transition to renewable energy sources, the electrification of transportation, technological advancements in steel production, and growing investments in grid modernization. These drivers collectively contribute to the market's growth and its pivotal role in supporting the global energy ecosystem.

Government Policies are Likely to Propel the Market

Energy Efficiency Standards and Regulations

Energy efficiency standards and regulations set by governments play a significant role in shaping the global Grained Electrical Steel market. These policies aim to reduce energy consumption and minimize losses in electrical systems. Grained Electrical Steel, known for its excellent magnetic properties that contribute to energy efficiency, is vital in complying with these standards. Governments worldwide are increasingly implementing stringent energy efficiency requirements for electrical equipment and systems, including transformers and generators. These standards specify the use of high-quality Grained Electrical Steel to minimize energy losses during power transmission and distribution.

In many regions, compliance with these regulations is mandatory, driving the demand for Grained Electrical Steel and encouraging manufacturers to develop and produce materials that meet the specified efficiency criteria. These policies contribute to the growth of the Grained Electrical Steel market by promoting energy-efficient electrical infrastructure.

Renewable Energy Incentives

Government policies promoting renewable energy sources, such as wind and solar power, significantly impact the Grained Electrical Steel market. Grained Electrical Steel is a critical component in the construction of generators and transformers used in renewable energy systems. As governments seek to reduce carbon emissions and transition to cleaner energy sources, incentives for renewable energy development have become common.

Feed-in tariffs, tax incentives, subsidies, and renewable energy mandates are examples of policies that encourage investment in renewable energy projects. These policies, in turn, drive the demand for Grained Electrical Steel in the production of generators and transformers used in wind turbines, solar inverters, and other renewable energy installations.

As the renewable energy sector continues to expand globally, driven by government support and environmental objectives, the Grained Electrical Steel market benefits from increased demand for efficient electrical infrastructure.

Trade Tariffs and Import Regulations

Government policies related to trade tariffs and import regulations can have a significant impact on the Grained Electrical Steel market. These policies can affect the cost and availability of Grained Electrical Steel, potentially influencing market dynamics and trade patterns.

Governments may impose tariffs on imported electrical steel products to protect domestic manufacturers or promote the use of locally produced materials. Conversely, they may reduce tariffs on imported Grained Electrical Steel to facilitate the growth of the renewable energy sector and electrical infrastructure development.

These trade policies can shape the competitive landscape and market penetration of Grained Electrical Steel in different regions, affecting the industry's global supply chain and pricing dynamics.

Environmental Regulations and Emissions Reduction Goals

Environmental regulations and emissions reduction goals set by governments also influence the Grained Electrical Steel market. Governments worldwide are increasingly focused on reducing carbon emissions and promoting environmentally responsible technologies.

Grained Electrical Steel, with its role in improving the efficiency of electrical systems, aligns with these goals by reducing energy losses in power transmission and distribution. Consequently, governments may provide incentives, grants, or favorable treatment to projects that incorporate Grained Electrical Steel to meet emissions reduction targets.

Infrastructure Investment Programs

Government policies related to infrastructure investment and modernization programs have a direct impact on the Grained Electrical Steel market. These programs allocate funding for the upgrade and expansion of electrical grids, substations, and other critical infrastructure.

Grained Electrical Steel is essential for the efficient operation of these electrical systems, and government-funded projects often specify its use to enhance energy efficiency and minimize losses. As governments continue to invest in the renewal and expansion of electrical infrastructure, the Grained Electrical Steel market benefits from increased demand for its products.

Research and Development Funding

Government policies that provide research and development (R&D) funding support innovation in the Grained Electrical Steel industry. These funds can be used to advance manufacturing processes, develop new grades of Grained Electrical Steel with enhanced properties, and improve production efficiency. R&D grants and incentives encourage manufacturers to invest in the development of more energy-efficient and environmentally friendly Grained Electrical Steel products. These innovations can help the industry stay competitive and align with evolving energy efficiency standards and market demands.

In conclusion, government policies related to energy efficiency, renewable energy incentives, trade tariffs, environmental regulations, infrastructure investment, and R&D funding all have a substantial impact on the global Grained Electrical Steel market. These policies collectively shape market dynamics, drive demand for energy-efficient electrical infrastructure, and contribute to the industry's growth.

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Key Market Challenges

Supply Chain Disruptions and Raw Material Availability

One of the primary challenges in the global Grained Electrical Steel market is the vulnerability to supply chain disruptions and uncertainties related to the availability of raw materials. Grained Electrical Steel, also known as grain-oriented electrical steel (GOES), is a specialized steel alloy with precise magnetic properties. It is a critical component in the production of energy-efficient transformers and generators used in electrical power distribution systems.

Several factors contribute to the supply chain challenges in the Grained Electrical Steel market:

• Dependence on a Limited Number of Suppliers: The production of Grained Electrical Steel is highly specialized and dominated by a few key manufacturers globally. This concentration of suppliers increases the vulnerability of the supply chain to disruptions caused by factors like labor strikes, natural disasters, or geopolitical tensions in the regions where these manufacturers are located.
• Raw Material Sourcing: Grained Electrical Steel requires specific raw materials, including iron ore and silicon. Any fluctuations in the availability or pricing of these raw materials can have a significant impact on the cost and supply of Grained Electrical Steel.
• Transportation Challenges: The transportation of Grained Electrical Steel over long distances can be complex and costly. Interruptions in global logistics networks, such as shipping delays or container shortages, can lead to delivery delays and increased costs for manufacturers and end-users.
• Trade Disputes and Tariffs: Trade disputes between countries can result in tariffs or trade restrictions on Grained Electrical Steel, affecting the cost and availability of the material in different markets. These disputes can disrupt established supply chains and create uncertainty for manufacturers.
• Market Volatility: The Grained Electrical Steel market is susceptible to demand fluctuations influenced by economic conditions, energy infrastructure investments, and government policies. Manufacturers must carefully balance production capacity with market demand to avoid overproduction or shortages.

To mitigate these challenges, industry stakeholders, including manufacturers and end-users, often engage in strategic supply chain management practices. This includes diversifying suppliers, maintaining strategic inventories, and seeking alternative sources of raw materials. However, achieving resilience in the supply chain remains an ongoing challenge in the Grained Electrical Steel market.

Technological Advancements and Material Innovation

While technological advancements are typically considered drivers of progress, they can also pose challenges in the Grained Electrical Steel market. Specifically, the rapid pace of technological innovation in electrical power systems and the demand for higher efficiency present challenges for traditional Grained Electrical Steel manufacturers.

Here are key aspects of this challenge:

• Advanced Materials: Emerging materials and alloys, such as amorphous and nanocrystalline alloys, are being developed to outperform traditional Grained Electrical Steel in terms of energy efficiency and magnetic properties. These advanced materials offer superior performance in reducing energy losses and are particularly attractive in applications requiring high-frequency operation.
• Customization and Tailored Solutions: End-users in industries like renewable energy and electric vehicles increasingly demand customized solutions that match specific application requirements. Traditional Grained Electrical Steel manufacturers face challenges in providing tailored products that meet evolving market needs.
• Environmental Considerations: There is a growing emphasis on sustainability and environmental responsibility in material production. Traditional manufacturing processes for Grained Electrical Steel can be resource-intensive and generate waste. Manufacturers face pressure to develop more environmentally friendly production methods and materials.
• Global Competition: International competition in the Grained Electrical Steel market has intensified, with new entrants and established steel manufacturers vying for market share. This competition has led to pricing pressures and the need for innovation to maintain a competitive edge.

To address these challenges, manufacturers of Grained Electrical Steel must invest in research and development to keep pace with technological advancements and evolving market demands. This includes exploring eco-friendly production methods, optimizing existing materials, and developing new products that offer improved energy efficiency and performance. Navigating this landscape of innovation while maintaining the reliability and reputation of traditional-grained electrical Steel products is a complex challenge for industry players.

Segmental Insights

Conventional Insights

The Conventional segment had the largest market share in 2022 & expected to maintain it in the forecast period. Conventional Grained Electrical Steel has a long history and well-established manufacturing processes. Many steel manufacturers have extensive experience and infrastructure dedicated to producing this type of electrical steel. This history and expertise have given conventional GOES a competitive advantage in terms of production capacity and reliability. Conventional Grained Electrical Steel is highly versatile and suitable for a wide range of applications, including transformers, generators, and other electrical devices. Its magnetic properties, particularly when properly oriented, make it ideal for power distribution and transmission systems, where efficiency and minimal core losses are paramount. Conventional GOES has a strong track record of performance and reliability. It has been widely used in critical electrical systems for decades, earning the trust of utilities, manufacturers, and end-users. This history of reliability has contributed to its continued dominance in the market. Conventional Grained Electrical Steel, due to its well-established manufacturing processes and economies of scale, has often been more cost-competitive than newer, specialized variants of electrical steel. This cost-effectiveness has made it an attractive choice for a broad range of applications. Conventional Grained Electrical Steel typically complies with international standards and regulations related to electrical efficiency and performance. This compliance is essential in applications where strict adherence to industry standards is required. Conventional GOES is widely available from multiple manufacturers on a global scale. This availability ensures a stable supply chain and makes it accessible to a wide range of customers and industries.

Transformers Insights

The Transformers segment had the largest market share in 2022 and is projected to experience rapid growth during the forecast period. Transformers are vital components in electrical power distribution and transmission systems. They play a central role in regulating voltage levels, stepping up or down the voltage as needed to ensure efficient and safe electricity transmission over long distances.

Grained Electrical Steel is uniquely suited for transformer cores due to its exceptional magnetic properties, which help minimize energy losses and improve the overall efficiency of the transformer. As a result, transformers equipped with Grained Electrical Steel cores are highly efficient, making them essential in power infrastructure.

There is a growing global emphasis on energy efficiency and sustainability in electrical systems. Transformers constructed with Grained Electrical Steel cores are known for their energy-efficient operation, reducing energy losses during power transmission and distribution. Governments and utilities worldwide are increasingly focused on upgrading their electrical grids to improve efficiency and reduce greenhouse gas emissions. Grained Electrical Steel supports these sustainability goals by enhancing the performance of transformers.

Transformers are used in various applications, including utility-scale power distribution, industrial facilities, commercial buildings, and residential settings. They are versatile and serve as critical components in various industries. The diverse range of applications for transformers ensures a consistent demand for Grained Electrical Steel across different sectors, contributing to its dominance in the market.

Electrical infrastructure, including transformers, is subject to strict regulatory standards and efficiency requirements in many regions. These regulations often stipulate the use of energy-efficient materials, such as Grained Electrical Steel, to meet performance standards. The compliance of Grained Electrical Steel with international standards for electrical efficiency reinforces its use in transformers for various applications.

Transformers are long-term investments, and their reliability is crucial to ensuring uninterrupted power supply. Grained Electrical Steel is known for its durability and stability, which contribute to the longevity and reliability of transformers. End-users, including utilities, industries, and commercial facilities, prioritize reliable transformers to minimize downtime and ensure consistent power distribution.

Many regions are investing in the modernization and expansion of electrical infrastructure to meet growing energy demands and accommodate renewable energy integration. These initiatives drive the demand for transformers and, by extension, Grained Electrical Steel.

Grained Electrical Steel is widely available from multiple manufacturers on a global scale. This availability ensures a stable supply chain and makes it accessible to a wide range of customers and industries.

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Regional Insights

 Asia Pacific

The Asia Pacific region had the largest market for grained electrical steel in 2022. This is due to the rapid growth of the power and renewable energy sectors in the region. China is the largest market for grained electrical steel in the Asia Pacific, followed by India and Japan.

The growth of the grained electrical steel market in Asia Pacific is being driven by a number of factors, including:

• Increasing demand for electricity: The Asia Pacific region is home to a growing population and a rapidly developing economy, which is driving up demand for electricity.
• Growing renewable energy sector: The Asia Pacific region is investing heavily in renewable energy sources such as solar and wind power. Grained electrical steel is a key component in renewable energy technologies, such as wind turbines and solar panels.
• Government support: Governments in the Asia Pacific region are supporting the growth of the grained electrical steel market through various initiatives, such as subsidies and tax breaks.

North America

North America had the second-largest regional market for grained electrical steel in 2022. The growth of the market in North America is being driven by the increasing demand for energy-efficient transformers and motors in the region. The United States is the largest market for grained electrical steel in North America, followed by Canada.

The growth of the grained electrical steel market in North America is being driven by a number of factors, including:

• Aging infrastructure: The power grid and other infrastructure in North America is aging and needs to be upgraded. Grained electrical steel is a key component in energy-efficient transformers and motors, which can help to reduce energy consumption and greenhouse gas emissions.
• Government regulations: Governments in North America are implementing regulations to reduce energy consumption and greenhouse gas emissions. Grained electrical steel can help businesses and consumers to comply with these regulations.

Recent Developments

• In March 2023, ArcelorMittal announced an investment of USD 317.9 million to establish a new production unit for electrical steels at its Mardyck site in France. The unit is expected to produce steel used in electric and hybrid vehicles and industrial machinery.
• In November 2022, POSCO announced an investment of USD 848.6 million to produce 300,000 tons of non-oriented electrical steel sheets per year at its Gwangyang Works. The company aims to increase its production capacity of high-efficiency non-oriented electrical steel sheets from 100,000 tons to 400,000 tons per year by 2025.
• In October 2022, Nippon Steel Corporation announced a joint venture with JFE Steel Corporation to establish a new company to produce electrical steel. The new company is expected to start production in 2025 and will have a production capacity of 2 million tons of electrical steel per year.

Key Market Players

• ArcelorMittal S.A
• Nippon Steel & Sumitomo Metal Corporation
• POSCO
• Shougang Group
• Nucor Corporation
• Baosteel Group
• JFE Steel Corporation
• ThyssenKrupp AG
• Voestalpine AG
• HBIS Group

In this report, the Global Grained Electrical Steel Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Grained Electrical Steel Market, By Product Type:

o   Conventional

o   High Magnetic Strength Sheets

o   Domain Refinement   

• Grained Electrical Steel Market, By Thickness:

o   0.2 mm and Below

o   0.23 mm

o   0.27 mm

o   0.30 mm

o   0.35 mm and Above  

• Grained Electrical Steel Market, By Application:

o   Transformer

o   Power Generator

o   Electric Motor

o   Others  

• Grained Electrical Steel Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Kuwait

§  Turkey

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Grained Electrical Steel Market.

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Company Information

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