US Precision Steel Fabrication Market is forecast to reach $2.1 billion by 2025, after growing at a CAGR of 6.2% during 2020-2025. With the growing demand of steel in automotive and construction sector, the US precision steel fabrication market is witnessing an increase in market growth. Whereas with the growing industrialization in US Growing purchasing power with industrialization in US, will further enhance the overall market demand for US Precision Steel Fabrication during the forecast period.
US Precision Steel Fabrication Market Segment Analysis – By Type
Stainless Steel segment holds the largest share in the US precision steel fabrication market. Stainless steel has strong mechanical properties at ambient temperatures as compared to other materials. In particular, its properties such as ductility, elasticity and hardness, enabling it to be used in difficult metal forming modes. Stainless steel has been the best fire resistance of all metallic materials when used in structural applications, having a critical temperature above 800°C. Stainless steel is also considered as the “green material” and is recyclable for infinite times. Whereas its nature of being environmentally neutral and inert when in contact with elements such as water and it does not leach compounds that might modify their composition, are driving the demand for stainless steel.
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US Precision Steel Fabrication Market Segment Analysis – By Application
Compressor valves sector has been the primary market for US Precision Steel Fabrication. Compressor valves were used in various ways such as in air conditioning systems, brake systems, heat pumps and many others. Valve plates are used in a wide range of compressor applications across different gas compositions and operating temperatures, acting as seals between different pressure zones within the compressor. They open when differential pressures between zones are reached and allow gases to flow from high to low pressure regions during the compression cycle. This makes compressor valves as one of the very essential part of different machineries and will drive the market growth for steel fabrication market.
US Precision Steel Fabrication Market Segment Analysis – By End Use
Automotive sector has been the largest consumer of steel fabrication market. A wide range of fabrication technologies are used by this industry, whether for heavy vehicles, through volume or niche car manufacture to motorcycles. Materials too vary from metals to composites. The growing production of motor vehicles is expected to drive the market growth for steel fabrication market. According to the production statistics of OICA, US have produced 10.8 million units of vehicles combined with the production of passenger cars, heavy commercial and light commercial vehicles.
US Precision Steel Fabrication Market Drivers
Growing demand for battery electric vehicles
The shift towards electric vehicles in the developed and developing nations would increase the growth of existing IC engine vehicles and also drive the US Precision Steel Fabrication market over the forecast timeframe, as with the manufacturing of new type of vehicles (electric vehicles) the demand for steel will also increase. According to IEA, Norway, the Netherlands and Japan are frontrunners in the electronic vehicles segment. Norway held the share of 46 percent in terms of the global new electric car sales as reported by IEA in 2018. In order to meet zero emission targets under the “Paris Climate Accord”, in 2017, France government has announced that it will ban diesel and gasoline-powered vehicles completely and switch to electric powered vehicles by 2040.
Durability of steel
Steel is highly durable; they are corrosion resistant and tensile. It is relatively lighter than other building materials such as wood, concrete and other materials. The strength of steel is higher than its density which makes it an excellent choice for construction. It is known to be a sustainable metal. Well-constructed buildings with structural steel have a minimum shelf life of about 20-30 years if maintained well. Whereas it is ductile and malleable also. Its metallurgical properties enable it to be fabricated into any shape and size with ease.
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US Precision Steel Fabrication Market Challenges
Adoption of composite or other materials in automotive sector
Recently in order to manufacturer of automotive industries are focusing more towards the lightweight of vehicle the use of aluminum have increase and can potentially reduce the weight of the vehicle body. It has shown that up to 50% weight saving for the body in white can be achieved by the substitution of steel by aluminum. Magnesium is another light metal that is becoming increasingly common in automotive engineering. Need for higher fuel efficiency, weight minimization, environmental regulations and policies as well as customer demand forces the auto maker companies to focus on developing new materials and re-designing of the existing one and selecting materials reasonably.
Impact of COVID-19
In the US, the assembly plant closures are adding intense pressure on an increasingly distressed global supply base of the automotive sector, where companies are at risk of defaulting on covenants, potentially requiring banks to step in. The exogenous shock of the coronavirus pandemic exacerbates an existing downshift in global demand. A significant amount of restructuring may be expected in the auto retail sector as dealers are unable to pivot quickly enough to changing demand conditions.
US Precision Steel Fabrication Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the US Precision Steel Fabrication market. In 2019, the market of US Precision Steel Fabrication has been consolidated by the top five players accounting for xx% of the share. Major players in the US Precision Steel Fabrication Market are Selco Manufacturing Corp., Copelands, Inc., American Grinding & Machine Co., Michigan Mechanical Services, Genzink Steel, Chicago Metal Fabricators, HMR fabrication unlimited Inc, Rothe Welding Inc., J.C MacElroy Company, Inc., Allstate Tower among others.
In January 2020, CoolSys, a parent of refrigeration and HVAC services companies nationwide, has acquired Tech Mechanical, a provider of commercial and industrial heating, ventilation, air conditioning and refrigeration services for southeast Michigan.
The growing demand of steel from automotive and construction sector, is likely to aid in the market growth of US Precision Steel Fabrication.
Steels are recyclable and also being environmentally friendly will increase the market demand for US Precision Steel Fabrication in the near future.
COVID-19 pandemic will create hurdles for the US Precision Steel Fabrication market.
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