Automotive steel is special steel that have high tensile strength and particularly used to make steel parts and equipment. Significant rise in automobile production is a key factor boosting the growth of the global automotive steel market. This is primary attributed to reviving economic conditions of world. Along with this, rapid industrialization and urbanization is another vital factor projected to boost the automotive steel market in the coming few years. Further other strong factors expected to fuel the automotive steel market are mentioned as below-
- Continuously investment by the prominent players in the automotive steel market has improved the product quality. Additionally, the physical and chemical properties of steel improved to larger extent. Due to massive R&D activities players are able to reduce the manufacturing costs of the automotive steel. For instance, in 2017, Posco, a Korean manufacturer of automotive steel launched giga steel line-up. This automotive steel is known for lower weight and higher strength.
- However, factors like high import and export duty and stringent regulatory norms for product approval are the two strong factors expected to impede the growth of the global automotive steel market.
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- Nevertheless, constant demands from automobile manufactures including Suzuki, Toyota, and Honda is going well with the positive trend and offering a lucrative gain for the growth of the automotive steel market. For instance, in 2018, Maruti Suzuki upgraded its existing Swift hatchback model with high tensile steel instead other conventional steel in India. Such initiatives to replace existing model and launch new model with high tensile strength are projected to boost the automotive steel market.
Steel is extensively used in the automotive industry due to its ability to provide safety and strength at a relatively lower price, as compared to other metals such as aluminum. On an average, a vehicle comprises 900 kg of steel with significant utilization in the body structure and drive train.
Rising production of vehicles, globally, is projected to drive the automotive steel market. Asia Pacific and Latin America are witnessing high domestic demand for vehicles due to rise in income, which in turn is expected to boost the demand for automotive steel. Stringent emission regulations have led to the advent of lightweight materials, which have poor recyclability and hence, generate a carbon footprint. However, considering the total vehicle lifecycle, steel is an effective environment-friendly choice due to its low emission during manufacturing and 100% recyclability during the end of the vehicle life. Sustainable long-term environmental benefits at a cost-effective price is a major driver for the automotive steel market.
North America CAFÉ (Corporate Average Fuel Economy) emission standards have made it mandatory to improve the average fuel economy to 54.5 miles per gallon by 2025. Europe is expected to reduce its average emission levels to 95 gm per kilometer by 2025. Steel companies, such as United States Steel and ArcelorMittal, are heavily investing in development of advanced high strength steel (AHSS) in order to conform with these emission regulations. Usage of AHSS helps reduce structural weight by 25% and lifecycle CO2 emission by 15%. Thus, demand for AHSS is anticipated to rise during the forecast period.
Introduction of lightweight aluminum is hampering the automotive steel market. However, AHSS is expected to witness higher demand than lightweight aluminum in the near future as AHSS is relatively cheaper yet reduces the structures weight.
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The global automotive steel market can be segmented based on steel grade, component, vehicle type, and region. Based on steel grade, the global automotive steel market can be classified into mild steel, alloy steel, high strength steel (HSS), and advanced high strength steel (AHSS). The AHSS segment is expected to expand during the forecast period owing to its weight saving benefits.
In terms of component, the global automotive steel market can be segregated into body structures and panels, drivetrain, suspension, and others. The body structures and panels segment is estimated to expand at a considerable growth rate during the forecast period due to the rise in rate of adoption of AHSS in order to reduce weight and improve structural safety.
Based on vehicle type, the global automotive steel market can be split into passenger vehicle, light commercial vehicle, and heavy commercial vehicle. The passenger vehicle segment is expected to expand at a significant pace in the near future owing to the higher production volume of passenger vehicles, globally.
In terms of region, the global automotive steel market can be segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Asia Pacific is expected to dominate the global market due to the rise in demand for vehicles in China and India, which in turn is likely to drive the automotive steel market in the region.
Key players operating in the global automotive steel market include United States Steel, ArcelorMittal, JFE Steel Corporation, Baosteel Group, and Nippon Steel & Sumitomo Metal Corporation.
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This post was originally published on The Market Plan