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The Electric Arc Furnace Market size is forecast to increase by USD 749.23 million, at a CAGR of 10.7% between 2023 and 2028. The market expansion is influenced by several key factors. Recent advancements in electric arc furnace technology have significantly improved their efficiency and productivity, making them a more attractive option compared to traditional blast furnaces. Furthermore, the increasing preference for electric arc furnaces due to their ability to process a wider range of raw materials, including steel scrap, has contributed to their growing popularity. The application of electric arc furnaces in the steel industry is on the rise, driven by their cost-effectiveness, energy efficiency, and flexibility in producing various steel grades. These factors collectively underpin the robust growth trajectory of the market.
Electric Arc Furnaces Market Forecast 2024-2028
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Addressing greenhouse gas emissions and reducing carbon footprints is imperative in today's industrial landscape, driving initiatives to minimize shutdowns and enhance recovery rates. With a focus on sustainability, industries are increasingly turning to electric vehicles and investing in urbanization and infrastructure development to mitigate environmental concerns. Research and development efforts aim to innovate high-efficiency technologies, despite requiring high capital investment. In metal manufacturing, technologies like dome-shaped roofs, cylindrical shells, and spherical hearths are employed in metal melting furnaces to reduce carbon emissions and optimize capital investment. The emergence of mini-mills, utilizing iron scrap as feedstock, further contributes to lowering carbon emissions. As industries strive to meet stricter regulations and embrace sustainable practices, minimizing environmental concerns becomes a key driver, fostering a shift towards greener operations and reducing carbon footprints across various sectors.
Globally, 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 need for iron ore extraction for steel production. This significantly reduces CO2 emissions, minimizes energy and water consumption, and lowers air pollution. Currently, CMC only uses 100% recycled scrap steel as the primary material in their steel production process and prevents over 19 billion pounds of scrap metal from being sent to landfills annually. Iron ore and steel or steel scrap can be used alone or in combination with other raw materials for the preparation of steel. The demand for steel scrap is highly affected by the fluctuating prices of iron ore.
Moreover, owing to an increase in electricity and energy costs, manufacturers have started using steel scrap as the major raw material to decrease their overall cost of production. In 2021, US Steel recycled approximately 5.2 million metric tons of scrap steel in integrated and minimal ills. Steel is recycled over and over without any loss of quality to the products being produced. Thus, increasing the application of steel scrap will drive the growth of the market during the forecast period.
The BF-BOF route of steelmaking uses coking coal as a source of carbon and energy in blast furnaces. A direct reduction of iron is another route of steel making, which relies on natural gas or non-coking coal to produce DRI, which is used with scrap steel to produce crude steel. The improvements in the extraction and mining technologies for natural gas and non-coking coal, respectively, have considerably increased their production. It has helped keep their prices at low levels. The low prices of natural gas and non-coking coal usually result in the increased production of DRI as the production cost declines.
In addition, the US, India, and Egypt are also expected to increase their share of the DRI-electric arc furnace route in their respective steel industries. Supply-side factors such as the increasing exports of natural gas from the US, Qatar, and Australia are also encouraging DRI producers to invest in new DRI plants. Thus, the expected increase in the share of DRI and scrap steel in the global steel output will drive the market growth and trends during the forecast period.
Steel output is drifting downward in various parts of the world, including Europe, and North America, which negatively impacted the growth of the global steel scrap market. Turkey, which is a major buyer of ferrous scrap exported from the US, made 4.6% less steel in the first half of 2022 as compared with the first half of 2021. Shredded scrap and prime grades are selling for below USD 400 per ton in parts of the US currently. Thus, the uncertainty in demand for steel will negatively impact the growth of the electric arc furnace (EAF) market. Owing to the Russian invasion of Ukraine, the economic conditions in numerous countries in the European region have deteriorated significantly, negatively affecting steel production worldwide.
However, in May 2022, the price of steel scrap declined. Thus, the instances show that the price of steel scraps is very uncertain, as it depends on various factors, such as the production of steel products. Therefore, the uncertainty in the steel scrap prices will negatively impact the profit of companies operating in the electric arc furnace (EAF) market. Such factors are driving the market growth during the forecast period.
The AC arc furnace segment is estimated to witness significant growth during the forecast period. The alternating current (AC) arc furnace segment will hold a major share of the electric arc furnace (EAF) market in 2023 and they utilize alternating current to produce intense heat through electric arcs, enabling the smelting and refining of steel and other alloys. One of the notable advantages of AC arc furnaces is their ability to efficiently melt a variety of raw materials, including scrap metal and direct reduced iron (DRI), to produce high-quality steel.
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The AC arc furnace was the largest segment and was valued at USD 493.65 million in 2018. The AC arc furnace segment continues to witness technological advancements, such as the implementation of innovative refractory materials and furnace lining designs aimed at enhancing durability and prolonging furnace lifespan. These developments contribute to reducing maintenance costs and downtime, increasing the overall competitiveness of steel producers who rely on AC arc furnaces. Thus, the above-mentioned advantages are expected to increase the adoption of AC arc furnaces, which will propel the growth of the AC arc furnace segment in the market during the forecast period.
Based on the capacity, the market has been segmented into 100 to 200 tons, 200 to 300 tons, more than 300 tons, and up to 100 tons. The 100 to 200 tons?segment will account for the largest share of this segment.? As a productive melting tool, the EAF process has been created. The raw material may be up to 100% scrap or various mixes of hot metal, pig iron, DRI (hot and/or cold), and HBI, utilizing electrical and chemical energy according to unit costs and power grid characteristics. By implementing several technological packages to optimize the process, to be chosen on a case-by-case basis depending on the performance figures to be achieved, the operation of an EAF can be made completely automatic. Such factors are expected to drive the growth of the 100 to 200-ton segment of the market during the forecast period.
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APAC is estimated to contribute 67% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. APAC holds a prominent position in the market in 2023, wielding considerable influence in the steel production industry through its extensive utilization of electric arc furnace technology. One of the primary drivers of APAC's prominence in the market is its staggering steel production capacity. The region, especially countries such as China, Japan, and South Korea, accounts for a substantial portion of the world's total steel output, a significant proportion of which is facilitated by electric arc furnace technology.
In addition, the export prowess of APAC countries in the realm of steel products further exemplifies the region's formidable presence in the market. This robust export activity not only accentuates APAC's influence in shaping the dynamics of the global steel industry through electric arc furnace manufacturing and trade but also highlights the region's pivotal role in meeting international steel requirements. Thus, the above-mentioned factors are expected to increase the adoption of electric arc furnaces in the region, which will propel the growth of the regional market during the forecast period.
Companies 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.
Daido Steel Co - The company offers electric arc furnaces such as 150-ton electric arc furnaces.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including Daido Steel Co. Ltd., Danieli and C. Officine Meccaniche Spa, Doshi Technologies Pvt. Ltd., Electrotherm Ltd., GHI HORNOS INDUSTRIALES SL, IHI Corp., JP Steel Plantech Co., Nippon Steel Corp., Nucor Corp., Nupro Corp., Primetals Technologies Ltd., Resco Products Inc., SARRALLE, Shougang Corp., Siemens AG, SMS group GmbH, Tam Celik Sanayi AS, Tenova Spa, Vesuvius Plc, and TYMEC
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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In the mining industry, recovery rate optimization aligns with sustainability goals, as miners explore alternatives to the traditional blast furnace. With changing production dynamics, start-and-go action gives way to more sustainable practices like DRI technology. Aiming to reduce steel consumption and initial capital investment, the industry increasingly focuses on ferrous and non-ferrous metals, fueled by the burgeoning electric vehicles market and the use of scrap metal. New technologies such as induction heating and plasma arc heating facilitate a shift towards electric vehicles and enhance aluminum production efficiency. Investments in power infrastructure enable the utilization of recycled metal parts and the creation of hybrid products, while dome-shaped roofs, cylindrical shells, and spherical hearths optimize mini mills and integrated steel facilities. In this evolving landscape, business segments strategize for sustainability, exemplified by operations like the Ostrava Steelworks, driving innovation and sustainability in the steel industry.
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Market Scope |
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Report Coverage |
Details |
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Page number |
172 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 10.7% |
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Market Growth 2024-2028 |
USD 749.23 million |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
10.09 |
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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 Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Daido Steel Co. Ltd., Danieli and C. Officine Meccaniche Spa, Doshi Technologies Pvt. Ltd., Electrotherm Ltd., GHI HORNOS INDUSTRIALES SL, IHI Corp., JP Steel Plantech Co., Nippon Steel Corp., Nucor Corp., Nupro Corp., Primetals Technologies Ltd., Resco Products Inc., SARRALLE, Shougang Corp., Siemens AG, SMS group GmbH, Tam Celik Sanayi AS, Tenova Spa, Vesuvius Plc, and TYMEC |
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Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our market 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
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