Electrical Steel Coatings Market Trends

Growth Drivers

• Growing industrial automation: Increased automation in manufacturing processes drives demand for efficient electric motors and transformers, thereby supporting the market. Around 76% of companies in the manufacturing sector plan to implement automation by 2027. Automation can reduce defects in manufacturing by 90%. Automated systems require components that can withstand rigorous operating conditions. Electrical steel coatings provide improved corrosion resistance and durability. Moreover, the rise of robotics and AI in manufacturing increases the need for precise and efficient electrical components, further propelling demand for quality electrical steel coatings. The adoption of industrial robots in manufacturing sector is expected to increase by 100% by 2025.
• Automotive electrification and expansion of renewable energy: The shift toward electric vehicles is increasing the need for high-quality electrical steel in motors and batteries, boosting the electrical steel coatings market. Also the growth of renewable energy sources, such as wind and solar power, necessitates high-performance electrical steel for generators and transformers, driving demand for coated products.

Challenges

• High product costs: The manufacturing process for electrical steel and its coatings is quite expensive due to the complex steps and raw materials involved. For instance, electrical steel is often made from iron, and alloyed with silicon to improve its magnetic properties, the fluctuations in the raw material prices directly influence the overall product cost. Also, continuous technological advancements uplift the production cost, which may limit its electrical steel coating sales growth to some extent.
• Presence of alternatives: The increasing use of alternative materials such as aluminum and other technologies can potentially hamper the demand for electrical steel coating products. Aluminum and composites are lighter than steel and are finding increasing applications in the automotive manufacturing sector. They effectively aid in weight reduction and lead to energy efficiency. Such characteristics are anticipated to make alternatives more attractive and impact the sales of electrical steel coatings.