While industrial shielded coils will be used for various applications, and that there is an increased requirement in automotive and electrical sectors, the silicon steel coil market is expected to expand significantly in the near future. According to a recent report issued by MarketsandMarkets, the silicon steel market would reach USD 30.5 billion in 2025 from USD 20.7 billion in 2019, with a CAGR of 4.9%. The major push for this increase is seen in the growing demand for energy-efficient products and developing renewable energy technologies, of which silicon steel coils use in transformer and motor applications will be a big part.
Fresh challenges from fluctuating prices, supply chain disruptions, and changing industry standards would require the changes in the procurement strategies of silicon steel coils. According to industry experts, success in procurement will be contingent on an approach that would center on joint knowledge with suppliers regarding quality assurance and sustainability practices. Market intelligence and analytical prowess would allow a company to leverage itself into obtaining a firm foothold in supply chain complexities that will arise in the silicon steel coil marketplace while preserving competitiveness in delivering its operational needs as well as sustainability goals going towards 2025 and beyond.
While industrial shielded coils will be used for various applications, and that there is an increased requirement in automotive and electrical sectors, the silicon steel coil market is expected to expand significantly in the near future. According to a recent report issued by MarketsandMarkets, the silicon steel market would reach USD 30.5 billion in 2025 from USD 20.7 billion in 2019, with a CAGR of 4.9%. The major push for this increase is seen in the growing demand for energy-efficient products and developing renewable energy technologies, of which silicon steel coils use in transformer and motor applications will be a big part.
The entire silicon steel coil market around the world is transforming significantly due to the advancements in technology and also changing industry needs. As an example, by 2023, energy and renewable energies are going to push the market into attractiveness, especially in automotive and electrical engineering. Mordor Intelligence's latest report on global silicon steel markets states that the market size could approach $25 billion by 2025 at around a 6% CAGR. This figure underlines the growing use of electric vehicles and the accompanying rise of the smart grid technologies that in need of such advanced magnetic materials for effective functionality and efficiency. Main market trend: Thinner, higher-grade silicon steel coils that maximize electrical performance but minimize energy losses. The research conducted by MarketsandMarkets notes that advanced materials can reduce losses to 30% or more against conventional grades. As sellers keep trying to engineer transformers, motors, and generators with much more efficiencies, this will increase demand on these high-grade silicon steel products. The trend makes manufacturers rely more on sustainable and ethical sourcing in procurement strategies, in line with global initiatives on carbon footprints reduction. On top of that, the shifting geopolitical landscape and the alteration of supply chains worldwide are already encouraging organizations toward more resilient strategies in procurement. This has led to manufacturers piling more money into alternative supplier bases and investing in local production capabilities due to the ongoing semiconductor shortage along with disrupted supply chains. According to a report by Grand View Research, regional players are gaining momentum with their shorter lead times and increased reliability, hence making organizations to bolster their systems for the future uncertainties. This is a part of a bigger movement toward localized supply chains that might come to redefine market dynamics in the next years.
Currently, the global silicon steel coil market is subject to fluctuating dynamics resulting from a wide array of variables influencing demand. According to recent industry analyses, the performance of silicon steel especially in the non-oriented segment gives a clear account of a market that has undergone massive changes over the last three quarters of 2023. Early-year hikes in prices owing to policies meant to invigorate the steel market were definitely true but did not attract much demand leaving prices within the framework of a weak but steady atmosphere.
The transition into renewable energy and increasingly high-efficiency demands for electrical machinery have been some of the key drivers of demand in the silicon steel coil sector. It is said that the demand for high-performance materials used in transformers and electric motors remains robust. According to industry analytics, the global silicon steel sector averages an estimated compound annual growth rate (CAGR) of about 3% by 2025 due mainly to advancements in electric vehicle technology and increase in renewable energy installations.
Buyer-seller dynamics continue to form behavioral patterns in the market. As domestic manufacturing trends evolve with the changing market, procurement practices must also undergo a shift. With forecasts showing stabilization of steel prices, the stakeholders in the industry have been advised to adopt pro-active purchasing strategies against price volatility. Emphasizing long-term contracts and supplier collaborations may improve procurement success in this competitive landscape and also enables the players in the silicon steel coil market to adequately respond to current challenges as well as future opportunities.
Hurdling over competition within the global market for silicon steel coils requires manufacturing and supplier production strategies that will facilitate success. It needs a better understanding of this niche market by both parties for profitability. These properties result in such steel mostly being an electrical device such as being the component of the transformer and motor which required special sourcing of raw materials.
They also share the common bond of developing long-term relationships with their suppliers: hoard communication, discuss production schedules, quality standards, market trends, etc. through trust-building. This way, manufacturers will be able to get a steady supply of high quality while suppliers help them understand demand fluctuations.
Market intelligence also plays an important role in decision-making. For manufacturers, they should anonymize investment in data analytics tools to effectively monitor trends in prices and supply- chain disruptions caused by competitors. This way, it becomes easy for the manufacturers to negotiate better terms and switch suppliers, thus alleviating overreliance on a single supplier.
Lastly, sustainable procurement becomes increasingly significant with the changing dynamism of the industry towards green initiatives. Procurement policies aligned with sustainability goals will improve brand image and create new markets. These strategies for sound procurement will, therefore, benefit the stakeholders in the silicon steel coil market by helping them ride through the odds and position them for future success.
Great changes are occurring globally in the Silicon Steel Coil arena with various challenges and opportunities influencing sourcing strategies. More recent assessments have shown that experts believe that procurement practices need an adjustment to the changing geopolitical landscape, especially under the tensions emerging in the technological and defense sectors. The main message coming out from the discussions above is the fact that companies have to build resilience into their supply chains as opposed to primarily focusing on cost optimization.
For example, according to a McKinsey report, companies are starting to prioritize some critical resilience-building activities to survive better in a multipolar world, with interlinked global value chains. This change is essential, as sourcing decisions are now also influenced by environmental sustainability and supplier diversity. More than 60% of the UK's government procurement, for instance, now considers environmental sustainability in addition to fulfilling a trend that has been shown to be detrimental to b2b sourcing."
On top of that, new procurement technologies such as AI and machine learning are changing how companies evaluate supplier costs for their negotiations. This data-based approach, as industry experts suggest, presents new sourcing opportunities and enhances market competitiveness. With the changes in 2025, procurement personnel would like to believe that this sort of strategy will define their success in the sourcing business in the Silicon Steel Coil market.
The year 2025 for the global silicon steel coil market will bring enormous changes. Manufacturing processes and materials technology innovations promise to change the production and utilization of these critical components. Improvements in electromagnetic properties along with new high-performance grades of silicon steel would benefit electrical devices by improving their efficiency and reducing energy losses, thereby increasing demand for silicon steel coils across several industries, mainly in renewable energy applications.
Market forecasts suggest that the increased focus on sustainable practices will further encourage the adoption of silicon steel coils. Industries are aggressively looking for materials that not only provide excellent performance but also satisfy environmental regulations and sustainability criteria. This trend is likely to catalyze investments in research and development, leading to the introduction of new production methods and products with a low ecological footprint that meet the changing demands of the market.
Apart from material innovations, procurement strategies will also evolve. Companies will have to usher in digital transformation by leveraging sophisticated data analytics and supply-chain management tools to manage the challenges of a global market effectively. With stiff competition lining up, a proactive approach to sourcing and procurement will be the key to securing good quality supplies at the right price. 2025 will be marked not only by new products but also by gaining procurement success through the companies' adaptation to changing market conditions.
Effective strategies include cultivating strong relationships with suppliers, leveraging market intelligence, and embracing sustainable procurement practices.
Strong supplier relationships facilitate regular communication and collaboration, ensuring a stable supply of high-quality materials and allowing suppliers to better manage resources.
Manufacturers can invest in data analytics tools to monitor pricing trends, supply chain disruptions, and competitor strategies, enabling better negotiation terms and identification of alternative suppliers.
Sustainability is critical as aligning procurement with eco-friendly initiatives can enhance brand reputation, attract new market opportunities, and meet evolving environmental regulations.
Challenges include adapting to the geopolitical landscape, increasing focus on supplier diversity, and building supply chain resilience beyond traditional cost-optimization strategies.
The introduction of AI and machine learning is transforming how companies analyze costs and optimize negotiations, unlocking new sourcing opportunities and enhancing competitive positioning.
Innovations in manufacturing processes, advancements in electromagnetic properties, and the development of high-performance silicon steel grades are anticipated to reshape production and enhance device efficiency.
The rising emphasis on sustainable practices will drive demand for materials that align with environmental regulations, leading to new investments in eco-friendly production techniques.
Companies should embrace digital transformation through enhanced data analytics and supply chain management tools to navigate the complexities of the global market effectively.
Key factors include environmental sustainability, supplier diversity, and resilience-building measures in response to a complex, interconnected global landscape.