The global push for cleaner energy is driving a surge in demand for electrical steel, a crucial component in electric vehicles (EVs) and new home appliances. Asia, particularly China, is leading the charge in EV production, significantly increasing the demand for electrical steel.
China has prioritized new energy vehicles as part of its strategic industries, implementing policies to support their development and supply chains. As of 2023, China holds a 38% share in new electric vehicle sales, outpacing Germany, the UK, and France, while the US lags with a 9.5% penetration rate.
The International Energy Agency predicts a twelve-fold increase in the global electric vehicle fleet by 2035, highlighting the potential for increased EV adoption worldwide. However, this rapid growth, coupled with a limited number of electrical steel producers, suggests a future supply shortage. Despite investments by major steelmakers to expand production, such as JFE Steel's partnership with JSW Steel in India, these efforts may not meet the projected global demand.
In response to these challenges, Fastmarkets is introducing new electrical steel prices for the China domestic and India import markets to enhance price transparency. This move comes amid rising concerns about the supply chain crisis affecting the energy transition movement.
