Electrical Steel Coatings Market - Forecast(2023 - 2028)

Electrical Steel Coatings Market Overview

The Electrical Steel Coatings Market is estimated to grow at a CAGR of 6.8% during the forecast period 2022-2027 and is valued at USD $340 million by 2027. Electrical steel coatings are pigmented coatings that are used to insulate electrical steel, a type of specialty steel with excellent magnetic properties, high permeability, and a small hysteresis area. Magnesium oxide is a commonly used material in electrical steel coatings. There are various grades of electrical coatings which are specifically used for certain grades of electrical steel. A common method of grading electrical steel is magnetic testing. Electrical steel is most commonly used in transformers with toroidal cores and motors. The report covers various segments of the Electrical Steel Coatings Market and analyze the market landscape, drivers, and challenges within the forecast period.

COVID-19 Impact

During the COVID-19 Pandemic, many industries had suffered a tumultuous time, and it was no different for the Electrical Steel Coatings Market. Many governments across the globe implemented lockdown regulations and factories & production facilities in many sectors came to a halt. The supply chain was greatly disrupted as many businesses followed the lockdown protocols. Some integral industries that use motors and transformers are the automotive industry, aerospace and defense, and the electrical industry. During the pandemic, automotive production was greatly reduced as many production facilities shut down. According to the Organisation Internationale des Constructeurs d’Automobiles (OICA), the production of passenger vehicles decreased by 16.9% from 2019 to 2020. According to the International Air Transport Association, the demand for passenger air travel fell by 65% from 2019 to 2020 with international travel decreasing by 75.6% since 2019. However, many governments have relaxed lockdown procedures as the public is being vaccinated and industries are resuming production. As such, the Electrical Steel Coatings Industry is expected to grow tremendously during the forecast period of 2022-2027. 

Report Coverage

The report: “Electrical Steel Coatings Market – Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the Electrical Steel Coatings Market.

By Type: C0, C2, C3 (C3A), C4 (C4A, C4AS), C5 (C5A, C5AS), C6.
By Coating Technique: Electroless plating, Physical Vapor Deposition, Chemical Vapor Deposition.
By Electrical Steel Type: Grain-oriented Electrical Steel, Non-oriented Electrical Steel (Non-oriented semi-processed Electrical Steel, Non-oriented fully processed Electrical Steel).
By Application: Static Machines (Power & Distribution Transformers, Welding Transformers, Audio Transformers, Current Transformers, Others), Rotating Machines (Electrical vehicle driving motors, Hermetic motors, AC motors, Intermittent service motors), Others.
By Geography: North America (USA, Canada, and Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, and Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, and Rest of APAC), South America (Brazil, Argentina, Colombia, Chile, and Rest of South America), Rest of the World (Middle East, and Africa). 

Key Takeaways

• The Asia-Pacific region holds the largest share in the Electrical Steel Coatings Market due to advancements in their Industrial, Automotive, and Energy sectors.
• C5 type of electrical steel coating is the most commonly used electrical steel coating in the Electrical Steel Coatings Market.
• The growth of industries like the Automotive industry and the Electrical industry are key drivers for the Electrical Steel Coatings Market.

Figure: Asia-Pacific Electrical Steel Coatings Market 2021-2027 (USD $ Million)

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Electrical Steel Coatings Market Analysis – By Type

The C5 coating type holds the largest share of 38% in the type segment of the Electrical Steel Coatings Market within the forecast period of 2022-2027. C5 coating type is a high-resistance insulation coating formed by a chemical treatment with the addition of an inorganic filler to enhance its electrical resistance. C5 coatings provide excellent surface resistivity both before and after stress relief annealing (SRA). The presence of organic parts ensures improved punch and die life during stamping operations. The C5A variant of C5 has a thinner coating thickness while C5AS is used primarily for preventing sticking of semi-processed non-oriented electrical steel and cold-rolled motor lamination steel during quality anneals. Some other types of electrical steel coatings are C0, C2, C3, C4, and C6 coatings. Their wide variety of applications in transformers and motors is one of the driving factors for the growth of this segment.

Electrical Steel Coatings Market Analysis – By Electrical Steel Type

Grain-oriented electrical steel is estimated to hold the largest share of 56% in the electrical steel type segment of the Electrical Steel Coatings Market within 2022-2027. Grain-oriented electrical steel is an important material that can generate magnetic flux without rotation at a stationary state. As such, grain-oriented electrical steel is ideal for use in transformers. It is often used in the form of lamination, wound, or punched sheets. Transformers are essential power-generating devices used practically in every industry. Some of the core industries that use transformers are the industrial sector and power & energy sector. According to the National Informatics Centre (NIC) of India, there was an 11.4% year-on-year growth in the mining sector followed by a 3.1% growth in the electricity sector in October 2021. According to British Petroleum (BP), the global consumption of energy in 2020 was valued at 557.1 exajoules. Another type of electrical steel that is used primarily in motors, is the non-oriented electrical steel. The growth in various sectors globally is projected to promote the growth of this segment and the Electrical Steel Coatings Market within 2022-2027.

Electrical Steel Coatings Market Analysis – By Geography

The Asia-Pacific region holds the largest share of 46% in the geography segment of the Electrical Steel Coatings market within the forecast period of 2022-2027. This is because the region accounts for substantial growth in the industrial sector and different industries like the automotive industry, the electrical industry, and the power & energy sector have observed an increase in demand. According to British Petroleum (BP), the Asia-Pacific region accounted for 45.5% of the global energy consumption in 2020, which is valued at 253.7 exajoules. One of the key applications of motors is in the automotive industry. According to the Organisation Internationale des Constructeurs d’Automobiles (OICA), the Asia-Pacific region had the largest production of motor vehicles in the year 2020, with a total production value of 44.3 million vehicles. China is the leading producer of motor vehicles in the world, with a total production of 25.3 million in 2020. These booming industries in the Asia-Pacific region prove to be a great driver for the global Electric Steel Coatings Market within the forecast period of 2022-2027.

Electrical Steel Coatings Market Drivers

The exponential growth of end-use industries like the Automotive Industry and the Electrical Industry:

As mentioned above, some of the key applications of transformers and motors are in the automotive industry and electrical industry among others. As such, the growth in these industries proves to be a great driver for the Electrical Steel Coatings market. According to the Organisation Internationale des Cosntructeurs d’Automobiles (OICA), the total production of vehicles increased to 57.3 million in 2021 which was a 9.1% increase from the production values of 2020. According to the International Energy Agency (IEA), the global electricity demand has increased by 5% year-on-year in 2021 and is estimated to grow by 4% year-on-year in 2022. China is the world’s largest consumer of electricity while India accounts for the largest global growth of 9%. These factors are ideal for the growth of the Electrical Steel Coatings Market within 2022-2027.

Electrical Steel Coatings Market Challenges

Regulations against Energy Consumption and Pollution for various Industries:

One of the main constraints for the Electrical Steel Coatings market is the various regulations and laws that are put in place to limit and reduce energy consumption and pollution. For example, in Switzerland, The Federal Energy Law envisages measures to reduce energy consumption and regulate the energy consumption of installations, vehicles, and equipment. This is done so to ensure an economic and environmentally friendly supply of energy. While such regulations don’t directly affect the Electrical Steel Coatings market, they affect the primary end-users of electrical steel applications, namely the energy sector and the automotive sector. These regulations are only becoming more stringent as many countries and governments are adopting measures to make energy consumption as environmental-friendly as possible. As such, this proves to be a challenge for the Electrical Steel Coatings market within 2022-2027.

Electrical Steel Coatings Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in this market. Electrical Steel Coatings top 10 companies include:

1. Axalta
2. thyssenkrupp AG
3. Rembrandtin Lack Ges.m.b.H
4. AK Steel Holding Corporation
5. Cogent Power Inc.
6. Chemetall GmbH
7. ArcelorMittal
8. JFE Steel Corporation
9. Novolipetsk Steel
10. Nippon Steel Corporation

Recent Developments

• On March 15, 2021, Axalta, a leading global supplier of liquid and powder coatings, announced that they have entered into a definitive agreement to acquire Anhui Shengran Insulating Materials Co., Ltd., expanding their electrical steel coatings portfolio. This will add new wire enamel products and capabilities to enhance their offerings to several end markets like automotive, renewable energy, and consumer electronics.
• On March 13, 2020, Cleveland-Cliffs, Inc. acquired AK Steel Holding Corporation, making them North America’s largest producer of iron ore pellets downstream into the production of value-added steel and specialty manufactured parts, as well as offering specialty solutions such as electrical steel coatings, for the automotive industry. 

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