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The Electric Arc Furnaces Market size is estimated to grow at a CAGR of 10.4% between 2022 and 2027 and the size of the market is forecast to increase by USD 659.73 million. Factors driving the market growth include lower investment requirements for the electric arc furnaces route than the BF-BOF route, new emission regulations in China, and increasing application of steel scrap.
This report extensively covers market segmentation by type (DC arc furnace and AC arc furnace), capacity (100-200 tons, 200-300 tons, more than 300 tons, and up to 100 tons), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our analysis of the adoption life cycle of the market indicates its movement between the innovator’s stage and the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027.
Global Electric Arc Furnaces Market Customer Landscape
Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
The increasing application of steel scrap is a major factor driving the electric arc furnaces market growth. Worldwide, the use of scrap steel is increasing to reduce the carbon footprint. Recycling steel scrap improves the steel industry's economic viability and reduces the environmental impact by reducing the requirement for iron ore extraction for steel production. This significantly reduces emissions of harmful CO2, minimizes energy and water consumption, and lowers air pollution. On average, 2.9 metric tons of CO2 is saved for each metric ton of scrap steels. Steel scrap has, therefore, become the preferred option of raw materials for steel producers.
Due to the increase in electricity and energy costs, manufacturers have started using steel scrap as the major raw material to decrease their overall cost of production as well. In 2021, US Steel recycled approximately 5.2 million metric tons of scrap steel in integrated and minimills. Steel is recycled over and over without any loss of quality for the products manufactured. Thus, increasing the application of steel scrap, which will boost the growth of the global electric arc furnaces market during the forecast period.
Increasing private ownership in the global steel industry is a major trend in the electric arc furnaces market. The global steel industry is known as an industry of national importance in most countries. This has helped the global steel industry as various national governments invested in large integrated steel plants to cater to the domestic and export demand for steel. The BF-BOF route is the most common method of steel production in the case of integrated steel plants.
Most of the developed countries have witnessed the privatization of their steel industry. Countries such as China and India still have a considerable presence of government-owned steel plants. These countries also witness consistent growth in the share of private-sector mills in their total steel output. For example, the share of private steel mills in Chinese steel production increased by 25% between 2007 and 2017. These factors have positively impacted the market growth.
Large share of BF-BOF method in the global steel output is a major factor hindering the market growth. The global steel industry has traditionally relied on large-scale integrated steel plants that use iron ore and coking coal to produce crude steel. This approach, known as the BF-BOF method, has been dominant in countries like China, where there are abundant reserves of these raw materials. As a result, there are significant barriers for integrated steel plant operators to exit the industry, and these barriers extend throughout the steel value chain.
To support the BF-BOF route, countries like Australia, Indonesia, and Canada have developed a robust ecosystem for exporting coking coal to major steel-producing nations such as China, India, and Japan. Australia, in particular, continues to increase its production and export of coking coal. However, the infrastructure for natural gas supply is not well-developed globally, which hampers investments in Direct Reduced Iron (DRI) plants and consequently restricts the growth of the global electric arc furnaces market.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Tam Celik Sanayi AS- The company offers electric arc furnaces which is capable of melting scrap and make upto 150 tonnes of steel in each melt.
Nippon Steel Corp.- The company offers electric arc furnaces that include Ultimate Batch System (UL-BA), which maximizes the effectiveness of scrap preheating.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market share growth by the DC arc furnace segment will be significant during the forecast period. The growing popularity of steel minimills in developing countries and countries that are rich in natural gas and the focus of the global steel industry on lowering production costs are the main factors that are expected to drive the growth of this segment during the forecast period.
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The DC arc furnace segment was valued at USD 435.55 million in 2017 and continue to grow by 2021. A DC arc furnace requires a steel producer to invest approximately 20%-30% extra money compared with an AC arc furnace of equivalent size as the conversion of 3-phase AC power into DC power requires additional investments in the transformer. The cooling system in a DC arc furnace is also costlier than that in an AC arc furnace. However, this increased capital expenditure can be recovered within 6 to 12 months of operations of the furnace as the maintenance, and operating costs are lower than that of an AC arc furnace. Thus, the DC arc furnace segment is expected to increase its market share during the forecast period.
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APAC is estimated to contribute 67% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
The overcapacity in the Chinese steel industry and the growing steel demand in India require investments in steel minimills that are very efficient and less capital-intensive compared with the traditional BF-BOF route. Apart from this, the availability of scrap steel and DRI is increasing in China and India, respectively. Thus, the adoption of steel minimills as the preferred steelmaking route is expected to drive the growth of the market in APAC during the forecast period.
In India, the fast-growing investments in transportation, communication, and infrastructure projects are expected to drive the consumption of steel significantly during the forecast period. The Indian government is planning to meet this growing demand for steel from domestically produced steel. The New Steel policy revised in 2021 outlined the vision to ramp up the installed steel capacity to 300 mtpa by 2030 from approximately 154 mtpa in 2021. Considering the high share of electric furnaces in the Indian steel sector compared with the global steel industry, capacity additions in the Indian steel industry are expected to drive the growth of the market in APAC.
Steel production in China is also growing at a significant rate, owing to the growth of the construction industry. Needle coke consumption in China is expected to increase due to the growth of the steel industry. This is because needle coke is used in making graphite electrodes, which are used in the steel manufacturing process. Therefore, all these factors will boost the regional market growth during the forecast period.
In 2020 and 2021, the outbreak of COVID-19 negatively affected the growth of the market in the region. However, APAC entered a recovery phase in 2021, owing to the initiation of large-scale vaccination drives and the removal of lockdown measures. Also, APAC has been witnessing developments to increase the production of steel. For instance, in October 2022, China's Baowu group acquired a stake in Xinyu steel to increase the crude steel output. Thus, the increasing production of steel output in APAC will drive the growth of the regional market during the forecast period.
The electric arc furnaces market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Electric Arc Furnaces Market Scope |
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Report Coverage |
Details |
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Page number |
166 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 10.4% |
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Market growth 2023-2027 |
USD 659.73 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
9.83 |
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Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 67% |
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Key countries |
US, China, India, Germany, and Brazil |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
China BaoWu Steel Group Corp. Ltd., Danieli and C. Officine Meccaniche Spa, Doshi Technologies Pvt. Ltd., Electrotherm Ltd., GHI HORNOS INDUSTRIALES SL, IHI Corp., JP Steel Plantech Co., Mitsubishi Heavy Industries Ltd., Nippon Steel Corp., Nupro Corp., Resco Products Inc., SARRALLE, SMS group GmbH, Tam Celik Sanayi AS, Techint, TYMEC, Vesuvius Plc, Whiting Corp., Wuxi Dongxong Heavy Arc Furnace Co. Ltd., and Xiye Tech Group Co. Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Capacity
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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