Silicon Steel Market Size, Growth, Industry & Revenue | 2031

Report Description

Silicon Steel Market Outlook

The Global Silicon Steel Market was estimated at USD 27,611.3 Million in 2022 and is anticipated to reach USD 52,754.5 Million by 2031, expanding at a CAGR of 7.6% during the forecast period.

Silicon steel or electrical steel is a steel alloyed with silicon. It is also known as transformer steel, due to its widespread use in electrical transformers and other electrical equipment. The silicon content in silicon steel typically ranges from 1% to 3.5% by weight, which helps to increase the electrical resistance of the material while reducing its magnetic permeability. This makes it highly suitable for use in applications where magnetic fields are important, such as in the cores of transformers and electric motors.

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Silicon steel is made from iron, silicon, and various alloying elements. The process involves melting and casting using an electric arc furnace reduction smelting process. Carbon reacts with oxygen to form carbon monoxide gas, and iron and silicon combine to make molten ferrosilicon. The steel is then shaped into coils or sheets, and its thickness is reduced through hot and cold rolling.

Macro-economic Factors

Industrialization

Industrialization drives the demand for silicon steel in automotive, electrical & electronics, construction, and other industries, making a positive impact on the market. According to the American Chemistry Council, global manufacturing contracted in 2023 in many countries. Global industrial output rose 0.6% in 2023 and growth is expected to pick up by 1.8% in 2024. According to the Netherlands Bureau for Economic Policy Analysis (CPB), global industrial production increased by 3.3% in 2022. This reflects an increase in production of 2.8% annual average of the previous ten years.

China, the US, Japan, Germany, India, South Korea, Italy, France, the UK, and Indonesia are the top 10 manufacturing nations across the globe. In advanced economies, industrial production exceeded pre-pandemic levels in 2022. Industrial production in the European Union went up 8% in 2021 as compared to 2020 and has continued its upward trend with a 5% increase in 2022 as compared with 2021. The global industrial production has increased by 4% in 2022 as compared to the previous year (2021). Thus, rapid industrialization is expected to boost the silicon steel market.

Raw Material Prices

Silicon steels are ferritic alloys of iron and silicon that have magnetic properties that make them useful in motors and transformers. The price of iron and silicon depends on various factors, including supply & demand, market conditions, natural disasters, geopolitical changes, and restrictions imposed by governments.

The supply chain of raw materials was affected by the impact of the pandemic on the transportation networks. The rise in silicon steel demand and thus, the increase in material requirement had an impact on raw materials availability and pricing. These raw materials have properties that make them suitable to use in transformers, electric motors & inductors, relays & solenoids, and others. These resources are an essential component of the global economy and international trade.

Silicon Steel Market Dynamics

Market Driver- Increased Electricity Generation across the Globe

Silicon steel, with a silicon concentration of 0.8 to 4.8%, finds applications in transformers, generators, relays, solenoids, and other parts that are involved in power distribution systems. Silicon steel has a high magnetic permeability and is inherently magnetic. It is used to make transformer cores. A high magnetic induction intensity is produced in the energized coil, allowing the transformer to be smaller than before.

Generally, cold-rolled silicon steel sheets are used to serve as iron core for the transformer. The iron core is divided into long strips based on its size. The narrow the strip leads to the improved the output. This saves the silicon steel sheet material in addition to lowering the temperature rise and eddy current loss. Thus, the demand for silicon steel is directly proportional to the rising electricity demand.

According to research, the global energy demand is projected to increase substantially and is expected to hit a peak of 778 Etta Joule or 18 million tonnes of oil equivalent by 2035. There has been a consistent increase in electricity production across the globe. The adjacent chart given by IEA displays the increasing electricity production across the globe, boosting the market.

Market Driver- Increasing Penetration of Electric Vehicles

According to the reports of the International Energy Agency, the electric car industry is registering exponential growth, as sales exceeded 10 million in 2022. A total of 14% of all new cars sold were electric in 2022, up from around 9% in 2021 and less than 5% in 2020. Electric car sales are expected to continue strongly through 2024. The growth of electric vehicles is attributed to policies related to reducing carbon dioxide emissions.

The introduction of electric vehicles (EVs) and the electrification of the drivetrain & powertrain are significant factors that are influencing the trajectory of the silicon steel industry. Electrical steel is a necessity for the electric motors used to power EVs. There is simply no substitute for this material, as the electromagnetic field that helps turn the rotor is not be produced without it. The silicon steel also allow machine designers to slim down the cooling systems in electric motors, that brings down the overall vehicle weight. Additionally, increasing investments in the electric vehicle industry is driving the demand for silicon steel. Thus, growth in EV sales is correlated to the increasing market opportunities for silicon steel.

Market Restraint- Price Fluctuations Hamper the Market

Price fluctuations for raw materials limit the market. One of the essential raw materials for electrical steel, ferrosilicon, suffers supply-side challenges, due to factors affecting the electrical steel market, including low demand, trade imbalances, and production reductions. For example, in 2023, poor production from numerous factories undergoing maintenance caused price volatility for ferrosilicon in Asia Pacific.

Numerous factors such as energy costs, exchange rates, steel market dynamics, global economic conditions, quality, grade, trade, and raw material prices impact the price of ferrosilicon. These factors have an impact on the product cost and, ultimately, the growth of the market.

Scope of Silicon Steel Market Report             

The report on the Global Silicon Steel Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Silicon Steel Market Segmental Outlook

Based on type, the global silicon steel market is categorized as grain oriented and non grain oriented. The grain oriented segment held a XX% share of the market in 2022, as grain oriented silicon steel is a valuable material for the production of energy-saving transformers and large-scale high-performance generators. Grain oriented silicon steel is an important iron core material for distribution transformers, power transformers, and small transformers in the form of lamination, winding, or punching.

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Based on thickness, the global silicon steel market is categorized as up to 0.35mm, 0.35mm to 0.50mm, and above 0.50mm.

The up to 0.35mm segment held a XX% share of the market in 2022. The demand for up to 0.35 mm thickness silicon steel is increasing, as thinner silicon steel has low eddy-current losses at high frequencies. This, in turn, increases the demand for silicon steel for motor production, as it increases motor efficiency and reduces electricity consumption.

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Based on application, the global silicon steel market is categorized as transformers, electric motors & inductors, relays & solenoids, home appliances, and others.

The transformers segment is expected to hold XX% of market share in 2031, as silicon steel properties such as low core loss make transformers highly efficient for energy transfer. The core of the transformer is made of silicon steel, as it is a magnetic material with high magnetic permeability. The energized coil produces a high magnetic induction intensity, reducing the size of the transformer.

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Based on end-user, the global silicon steel market is categorized as automotive, electrical & electronics, construction, and others.

The automotive segment held XX% share of the market in 2022. The growth of this segment is attributed to the growing demand for electric vehicles. Silicon steel is found in every part of modern vehicles, from small motors that drive mirrors and seats to large machines that are used in hybrid propulsion systems or complete vehicles.

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Regional Outlook

On the basis of region, the silicon steel market is divided into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

North America is expected to hold XX% share of the global market by 2031. Demand for electrical steel in the region is increasing due to the high demand from the domestic electric vehicle manufacturing sector. According to the Federal Reserve Bank of Chicago, as a share of total vehicle sales in the US, BEVs accounted for market share of XX% in 2021, and the three electric vehicles (BEV, HEV, and PHEV) together held XX% share of the market in 2021. Therefore, the growing vehicle production and demand in the region are driving the market as silicon steel is found throughout modern vehicles, from small motors that drive mirrors and seats to larger machines used in the propulsion systems of hybrid or fully electric vehicles. The traction motors and generators of these reciprocating drives are especially dependent on high-performance electrical steel.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the Global Silicon Steel Market

• Historical, Current, and Projected Market Size in terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Silicon Steel Market Performance