Electrical steel is popularly known as lamination steel, and is tailored to produce magnetic properties. While electrical steel finds application in several business verticals, transformers segment retains the maximum consumption globally.
Out of the two forms of lamination steel, non-grain oriented steel has been more profitable than the grain-oriented type, owing to superior electric and magnetic properties. The former type is used in the manufacturing of the core material for actuators and motors, and power steering systems.
Manufacturers from across the globe are preferring NGOES in the manufacturing process of electrical steel sheets, attributed to its ability to reduce overall magnetic loss and build up the concentration of aluminium/silicon.
Overall Status: Global Electrical Steel Market
As new technology innovations, such as hybrid cars and electric vehicles enter the automotive market, non-grain oriented steel is witnessing increasing demand from the automotive industry. Recent market report for the global electrical steel industry reflects steady growth prospects in the near future, with continued dominance of non-grain oriented electrical steel (NGOES). Throughout the forecast period 2016-2026, Asia Pacific (excluding Japan) will continue to dominate the market. On the other side, rapidly growing automotive sector in Western Europe, Middle East, and Africa will push demand for NGOES further.
The largest revenue share in APEJ will be clearly from non-grain oriented steel segment, over 40%. China is a key player in APEJ, with the maximum number of non-grain oriented electrical steel producing companies. However, the world of steel has recently witnessed two important activities related to steel, eventually electrical steel (non-grain oriented), which can potentially have a substantial impact on China’s (electric) steel market.
Historical Consolidation within Chinese Steel Market
It was confirmed in June this year that two of the top players in China’s steel market have announced consolidation. Baosteel Group and Wuhan Iron & Steel Group will integrate their operations soon, which is foreseen to be an optimistic move in addressing the saturation or oversupply of steel in China.
The integrated entity after their merging is expected to improve their market position and effectively minimise the impact of glut. According to experts in the industry, the post-merger company would potentially become the largest steel producer China-wide, in terms of capacity, and powerful supplier of steel products, including electrical steel.
Steel Trade Protectionism from EU
Recently, the European Union appealed for five-year trade protection against electrical steel manufacturers from five markets across the globe, including the U.S., China, Russia, Japan, and South Korea. This trade protectionism was imposed against American, Russian, Chinese, Japanese, and Korean steelmakers for cheap imports, restricting European manufacturers from making money.
The root cause of cheap import from the five markets is again, saturation of the steel market. It has also resulted in loss of a significant number of jobs. China and Russia markets are especially hit by five-year tariffs by EU, as their steel import undercut manufacturers, to a great extent. China is currently dealing with rising trade protectionism from EU, in a legal way. They have already announced to seek legal expertise for protection of their own steel export rights.
Due to the overcapacity crisis, the steel industry is currently witnessing a trade war heating up with each passing day. It’s too early to predict the result or the point where it would come to an end but a lot will depend on the choices of the U.K. and the U. S. markets – whether they will depend entirely on imported steel or will they sustain their domestic steel markets, will define the market status in the near future.
For more insights into the growth of unified communications within the electrical steel market, Future Market Insights’ detailed market report excerpts are available at here