Gwynne Johnston
Metals Technology Consulting, Inc
Barrington, IL, 60010, USA
and
Becky E. Hites
Steel-Insights, LLC
Douglasville, GA, 30135, USA

Summary
There is very little accurate information known about the total Electrical Steel market.
We have developed consumption model which accurately illustrates historical market dynamics for both Non Oriented and Grain Oriented electrical steels, also capable of suggesting future trends. Several regions have been selected as examples. NOES has shown a robust 5.1% CAGR globally since 2005. China has increased consumption by 11.5 % CAGR, while Japan remains stagnant (full production), Europe shows progressive slow increases, India has increased significantly over the last 4 years, and North America shows a slow progressive declining consumption. GOES production and consumption have changed dramatically over the last 10 years with major moves to HiB production and the use of thinner grades (driven by energy efficiency requirements). History of production and consumption is presented since 2006 together with projections to 2030 for future consumption based on published data for electricity consumption, GDP and housing starts.

1 Introduction
There is very little accurate information known about the total Electrical Steel market, consisting of Non Oriented Electrical Steel (NOES), primarily used for electric motors and Grain Oriented Electrical Steel (GOES), primarily used for transformers. Both markets are integral to the development and growth of our modern world. Unlike other segments, there is no centralized recording of production for electrical steel and analysis of individual market segments is usually considered “strategically commercially sensitive”. However, a great deal can be learnt from an analysis of global and regional trends.

There is a smaller segment using nickel and cobalt based electrical steel, but this will not be considered in this analysis.

2 The World of Non Oriented Electrical Steel (NOES)

2.1 NOES Global Market 2005 To 2019

The Non Oriented Electrical Steel (NOES) market has achieved a strong 4.1% compound annual growth rate (CAGR) for the past decade, despite a 21.3% drop in 2009 following the global economic seizure of 2008. The unparalleled growth and expansion of consumer living standards around the world resulted in the age of electrical drives and electronics propelling production/consumption of NOES in 2019 to 13.4 million tonnes. As with the overall steel industry, a significant percent of the capacity surge has occurred in China, but about one-fifth of the capacity growth was outside of China in South Korea, Vietnam and India.

NOES is unique in that there are no known alternative materials that can be used as a magnetic field conductive substitute. Powdered and compacted iron maintains a small (less than 1%) part of the motor market and is not expected to grow significantly. A further barrier to entry is the extended testing and approval process at the manufacturer for NOES grades used in applications such as motors, ceiling fans, garage door openers, and critical oil well pumps (and many other applications) due to the high, and unacceptable, cost associated with product failure.

For 2019, China was the largest NOES consuming region accounting for 62.6% of the market (up from 60.7% in 2018), followed by Europe at 9.4% (down from 11.7% in 2018), Japan at 8.2% (down from 8.3% in 2018), Other Developing Asia at 7.2% (down from 7.95% in 2018), South Korea at 4.25% (up from 3.89% in 2018), the Americas at 2.3% (flat with 2018), India at 4.7% (up from 3.8% in 2018), Russia & Turkey at 1.2% (down from 1.3% in 2018), and the Middle East & Africa at 0.1% (down from 0.2% in 2018).

Based on our definitions, the NOES market is delineated by four product categories:

• CRML (cold rolled magnetic lamination), defined as cold rolled steel with aluminum and silicon additions, mostly supplied without coating, finished with a heavy temper pass, and most often used in the annealed condition, after stamping of parts. CRML is mostly a NAFTA grade and accounts for 10% of market demand (dropping to 8% by 2030);

• Low grade NOES, defined as coated, cold rolled steel with silicon and aluminum contents up to 1.8%, typically without a hot band anneal, and most often used in the as-stamped condition – accounts for 74% of market demand and dominated by one grade (50H800) which accounts for 65% of the category consumption (dropping to 71% by 2030);

• High grade NOES, defined as coated, cold rolled steel with silicon and aluminum contents above 1.8%, normally with a maximum silicon of 3.2%, typically with a hot band anneal and used in the as-stamped condition – accounts for 14% of market demand (increasing to 18% by 2030); and

• HEV/EV NOES, which is an extension of the high grade NOES category and differentiated by thickness less than or equal to 0.35 mm and used uniquely in automotive drive motor applications – accounts for 3% of market demand (increasing to 8% by 2030). The use of conventional cold rolled in low grade motors, as has been the case until recently in India, has not been included as this use is declining and of insignificant importance. We have also not included the use of hot rolled silicon sheet, specifically in China, as active steps are in place within the country to eliminate the use of this product.

We include CRML in the analysis because in many motor applications, CRML and low grade NOES can be used interchangeably which, in our opinion, makes it a legitimate competing participant in the NOES market.

1) CRML capacity fluxuates with the steel markets, particularly automotive, and there can be wide swings based on market driven decisions.
(2) Low Grades NOES is defined as less than 1.8% Si and doesn't require a hot band anneal.
(3) High Grades NOES is defined as 1.8% Si and above, and excludes capacity determined to be HEV/EV grade.
(4) HEV/EV Grades NOES is a high grade steel with over 1.8% Si with unique metallurgical properties for processing.
China has many producers of hot-rolled non-oriented steel whose total Consumption is approximately 900K tonnes per year.
This tonnage is produced in sheet form (not coils) and will be replaced by cold rolled as additional capacity comes on stream.)
Source: Company Reports, Management Interviews, Metals Technology Consulting & Steel-Insights estimates

Following Chapters
2.2 China NOES
2.3 Europe NOES
2.4 Japan NOES
2.5 India NOES
2.6 North America NOES and CRML
2.7 Global NOES Consumption, Now and Future
3 The World of Grain Oriented Electrical Steel (GOES)
3.1 GOES Global Market 2005 To 2019
3.2 China GOES
3.3 Europe GOES
3.4 Japan GOES
3.5 India GOES
3.6 North America GOES
3.7 South America GOES
3.8 GOES Consumption, Now and Future

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