By Grade – Segment Analysis
Dual Phase (DP) segment held the largest share in the advanced high strength steel Market in 2019 as it is widely used in automobiles. In the year 2018, Chevrolet Volts used Advance High-Strength steel in the frame of its automobile. Suzuki the Japanese automobile company frequently uses the Advance high-strength steel in its automotive body part. For its property of being lighter, many US car Brands like Ford, Lincoln, Ram are using Advance High- Strength steel in the frame of its automobile. The COVID-19 outbreak has exposed several challenges for the automotive sector. Governments globally are preparing for a broader spread of the virus. South Korea, Italy and Japan are the most affected among the major industrialized economies. Consequently, 80 percent of automotive and related companies report that Coronavirus will have a direct impact on their 2020 revenues. 78 percent of companies do not have enough staff to run a full production line. However, more than 80 percent of the world’s automotive supply chain is connected to China. In January 2020 China’s car sales plunged by 18 percent. The China Passenger Car Association (CPCA) considers that the first two-month sales could decline by 40 percent or more compared to the same period in 2019. Production shortfalls resulting from supply chain disruptions in China will impact global automakers. The impact of COVID-19 on automotive sector will directly affect the market growth of dual phase grade in 2020. But after this year it will grow at a steady rate in 2021-2025.
By End User – Segment Analysis
Automotive sector has been the primary market for Advanced High-strength steel in 2019 growing at a CAGR OF 13.2%. The growth of the advanced high-strength steel market can be attributed to the rise in production of automobiles. It is expected that the amount of high strength steels used in the production of automobiles will double in the next 15 years. According to International Organization of Motor Vehicle Manufacturers the total production of automobile (commercial as well as Personal) in Asia-Pacific in the year 2018 was 52,449,078 units compare to 53,395,211 units in 2017. The increase in the global automobile production is a major factor leading to the growth of advanced high-strength steel in terms of volume across the globe. Construction industry is the second major market for the Advance-high strength steel. The steel rods which are used in the construction provide long-lasting durability and strength to the buildings. Many of the Commercial buildings in the United States and China are incorporating advance-high strength steel to provide the strength to the buildings as per requirement. According to world economic forum the Middle East and North Africa region is undergoing transformation. The rapid urbanization trend will boost the advanced high strength steel market which is primary thing in construction sector.
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Geography – Segment Analysis
APAC dominates the advanced high-strength steel market with a share of more than 58%, followed by North America and Europe. The economy of APAC is mainly influenced by the economic dynamics of countries such as China and India, but with growing foreign direct investment for economic development of South East Asia, the current scenario is changing. Countries in South East Asia are witnessing high growth in the aviation and automotive industries. According to the World Steel Association, on an average 95 million vehicles are being produced world-wide every year. Furthermore, Steel used per vehicle is 900kg on average. Advanced High-Strength Steels are now used for nearly every new vehicle design. Steel makes up more than 50% of today’s vehicles. Regional economic growth in developing Asia will decline sharply in 2020 due to the effects of the novel coronavirus (COVID-19) pandemic, before recovering in 2021, according to the Asian Development Bank’s (ADB) annual flagship economic publication. The report forecasts regional growth of 2.2% in 2020, a downward revision of 3.3 percentage points relative to the 5.5% ADB had forecast in September 2019. Growth is expected to rebound to 6.2% in 2021, assuming that the outbreak ends, and activity normalizes. The impact of COVID-19 will directly affect the economy of Asia-pacific which lead to hinder the market growth of advanced high-strength steel in the year 2020. But after this year it will grow at a steady rate in 2021-2025.
Drivers – Advanced High-strength steel market
- Mass consumption of High-strength steel in Automotive and Construction Industries
The increase in global automobile production is a major factor which influence the growth of Advanced High-strength steel market across the globe. Advanced high-strength steels (AHSS) are stronger, lighter, and produced with light life cycle impact, helping automakers decrease a vehicle’s life-long carbon footprint. The manufacturing body panels of automobiles increases their fuel efficiency by reducing their weight by approximately 60%. This, in turn, contributes to the growing demand for high strength steels from the automotive industry.
According to the World Economic Forum the Middle East and North Africa region is undergoing a transformation of urbanization trend that will see a very large number of people moving to key cities. The construction industry in these regions are increasing at the rate of 10%. Thus, it will augment the consumption and growth of advanced high- strength steel in Middle East and North Africa regions.
- Rise in the Consumption of Advance High-strength steel in Aerospace Industry
The increase in the growth of global Aerospace Industry in last two decade is another major factor up surging the consumption of Advance High-strength steel. The parts of wing, engine which generate thrust in plane is constructed using Advance High-strength steel. Some major parts of rocket, drone is also constructed using Advance High-strength steel.
Challenges – Advanced High-strength steel market
- High Manufacturing Cost can restrict the Growth of the Market
The manufacturing cost of Advance High-strength steel is high. According to the US Automobile Corporation, 35% of the cost is expend on the production of the frame of automobile. This frame is made of Advance high strength steel which ultimately increase the price of automotive. In present, there is not any substitute to reduce the price in production of Advance High-Strength Steel.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Advanced High-strength steel market. In 2019, the market of Advanced High-strength steel has been consolidated by the top five players accounting for xx% of the share. Major players in the Advanced High-strength steel Market are ArcelorMittal S.A., NanoSteel, AK Steel Corporation, Nucor Corporation, MTL Advanced Ltd and among others.
- In December 2019, HBIS Group and POSCO Group signed a Memorandum of understanding (MoU) for the initiation of a joint venture to develop, produce, and sell high-end steel products to the automotive industry of China.
- In May 2019, United States Steel Corporation has announced an investment of $1 billion in one of its manufacturing unit at Mon Valley to increase the production of Advanced High-strength steel.
- Asia-Pacific dominates the high-strength steel market owing to increasing demand from automotive and construction sector.
- Physical attributes such as ductility, formability, and easy to weld, contribute towards the growth of advanced high strength steels.
- With advanced high-strength steel demonstrating tensile strengths twice that of high-strength steel, it would appeal to the automotive market even if it didn’t decrease weight.
Related Reports :
1. Ultra-high Strength Steel Market
2. Special Steel Market
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