The global grain oriented electrical steel market is anticipated to observe steady growth over the coming years. Favorable regulatory policies are playing a vital role in the growth of the market. Utility regulators have been focusing on ways to augment energy efficiency and reduce losses in transformers. Increasing focus on energy conservation, reduction in carbon dioxide emission, and life-cycle costing is estimated to spur the growth of the market over the coming years.
The product is defined as an alloy of iron-silicone and has the ability to provide high permeability and low core loss for electrical transformers. It is considered as the most energy efficient steel and widely utilized as the core of power transformers. Therefore, the product is also known as transformer steel around the world.
Increasing demand for electricity, especially in developing countries such as India, Indonesia, and Vietnam, is likely to positively influence the market. Rapid urbanization and growing population these counties is poised to bolster the need for expansion in transmission capacities. For instance, National Institution for Transforming India (NITI) added nearly 51,000 circuit kilometers (CKM) of transmission from 2016 to 2017. Thus, steady growth in transmission network is projected to play an important role in product demand.
However, the market is anticipated to experience stumbling blocks in developed regions such as the U.S. and Europe. These regions are estimated to witness relatively slow growth in transmission and energy generation over the coming years. Nevertheless, replacement demand is expected to continue rising with increased focus on high-end quality products. In addition, electricity demand specifically from the utility power sector is observing plateaued trend in the U.S.
Another key challenge for the growth of the market is burgeoning popularity of amorphous steel. The primary challenge for transformer manufacturers is to reduce or minimize core losses. Traditionally, cold-rolled grain oriented (CRGO) steel was preferred by transformer manufacturers. However, the ability of amorphous material to minimize core losses by a significant margin as compared to CRGO is projected to augment the demand for amorphous steel. This will, thereby, restrain the growth of the grain oriented electrical steel market.
On the basis of type, market is segmented into CRGO steel and HiB high permeability GOES. Over the coming years, the HiB segment is likely to register significant growth owing to rising focus on energy efficiency. HiB high permeability GOES offers reduction of core losses. Heightened demand for GOES for replacement and maintenance, especially in the U.S. and Europe, is poised to contribute to the growth of the segment during the forecast period.
CRGO (cold-rolled grain-oriented sheet) steel represented a large share in the market in 2017. However, the trend is expected to change by 2025, as power regulators opt for more efficient and energy guidelines-conforming product with minimal core losses, which will thereby fuel the demand for HiB and amorphous steel.
Geographically, the grain oriented electrical steel market can be segmented into Europe, Asia Pacific, North America, Central & South America, and Middle East & Africa. Asia Pacific is projected to account for a sizeable share in the market in terms of value as well as volume. Countries such as India and China are anticipated to be significant contributors in the region.
Total power capacity in India increased by nearly 77 gigawatt (GW) between 2014 and 2017. In addition, the government of India achieved a new milestone by electrifying nearly 13,123 villages during the same period. Thus, steady growth in the power sector of the key countries of the region is estimated to positively influence the industry.
Some of the prominent companies operating in the global GOES market are ArcelorMittal; POSCO; Baosteel Co.; Ltd.; Nippon Steel & Sumitomo Metal Corporation; AK Steel Corporation; and others. Key vendors in the market are adopting merger strategies to capture emerging markets such as India, Indonesia, and Malaysia.
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