Light Steel Framing Market size is forecast to reach $26.4 billion by 2025 after growing at a CAGR of 3.8% during the forecast period from 2020-2025. There has been a surge in the demand for steel in recent times, owing to the various advantages of steel, such as overall load, construction cost and quality over concrete. Being strong and relatively lightweight too, steel also has cost advantage over any other material used for construction such as concrete, wood etc. With the growing infrastructure needs which demand construction at high speed, strong structure and economic viability, light steel framing industry has a potentially successful future.
Owing to the aftermaths of the global pandemic- COVID-19, it has been estimated that the demand for steel is going to reduce by 11.6% by the end of 2020, but the promising news is that the demand is going to increase drastically by 9.2% in the year 2021. The developed countries such as the US and Europe are more likely to face heavier losses as compared to developing countries such as India.
Light Steel Framing Market Segment Analysis – By Product Type
Studs/Joists held the largest share in the light steel framing market. Steel joists offer consistent quality, predictable performance and high strength-to-weight ratio, and they are dimensionally stable. They resist contraction, warp, crack or twist which makes them perfect for use in both residential and commercial projects.
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Light Steel Framing Market Segment Analysis – By Application
Non-residential constructions have always been the primary source of business for steel industry. Light steel framing products are becoming more famous in non-residential construction industry because of its unique lightweight trait which makes it comfortable and safe to handle during construction.
Light steel framing products offer various benefits in the long run which makes it a preferred product in the non-residential construction industry as it is sustainable and idle for constructions to last in a long run.
China being the largest consumer of steel across the globe, has been affected the most from the global pandemic. As a result of the global pandemic, china was in a continuous lockdown for 8 weeks in the beginning of the year, which resulted in a 6.8% decrease in its GDP. This eventually affected its manufacturing sector, which saw a dip by 8.4%. Nonetheless, China was out of lockdown by the end of April, and its production sector resumed at full swing. Though the production was resumed, there was not much demand for manufacturing, as China was consuming it’s piled up stocks.
Light Steel Framing Market Segment Analysis – By Geography
APAC dominated the light steel framing market with a revenue share of more than 45%, followed by Europe and North America collectively making a share of 44%. 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 gradual growth in the infrastructure industry and is expected to grow in the coming years. The construction industry in APAC will witness a growth at a CAGR of 7.06% to reach USD 3.092 billion by 2024. The commercial building construction market is expected to record a CAGR of 9.6% during 2020-2024.
Light Steel Framing Market Drivers
Increasing Investments in Construction Industry
With the advent of modern-age technology, there has been a surge in the demand for constructional activities and non-constructional activities. The construction industry is expected to record a CAGR of 15.7% (USD 738.5 Billion) by the year ending 2022, which will hugely impact the steel framing industry too. This in turn has given a boost to the steel industry. Thus, the growing need for infrastructure facilities and other amenities can be considered as the highest driving factor of the steel industry.
Growing Popularity of Green Buildings
With the growing awareness of environmental wellness and economical sustainability, there has been an increase in the construction of green buildings to promote environment-friendly activities. In lieu of being environmentally friendly, construction companies have begun to adopt practices and products that promote the same. Light steel framing industry has resorted to using of recycled materials to produce their products and promotes environmental sustainability, which has made it a hit among green buildings.
Less time taken to complete the work
Light Steel Framing Reduces the Projected Time of Construction by 50% as compared to Conventional methods. In the case of concrete, we need to make sure it is mixed properly and wait for it to finish drying. But in the case of light steel framing products, we can be assured of the quality and thus the work eventually gets over quicker as compared to other alternatives. This helps in saving a lot of time, thus increasing the efficiency of the construction.
Lower Construction Costs as Compared to Concrete Structures
Not only does concrete takes a lot of time to complete construction, but it is also quite expensive as compared to light steel framing products. Purchasing of concrete in large number of units is very expensive, whereas buying light steel framing products for the same job/purpose will cost way less. Light steel framing products can also ensure a quality finish.
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Light Steel Framing Market Challenges
Availability of raw materials
The raw materials required to procure steel plays a major role in manufacturing steel. Iron ore is one of the dominant raw material required to manufacture steel, and its availability and mobility plays an important role in the feasibility of steel manufacture. The raw materials are not easily available and thus it makes it even costlier. Setting up of a factory needs to be made based on these factors thus restricting the location which makes the transportation of raw materials expensive and in some cases impossible.
Stringent regulations to reduce carbon footprint and VOC emissions on steel manufacturing is a major challenge to the steel industry. Manufacturing of steel releases dangerous chemicals and thus causes air pollution. There is also a risk of these chemical effluents being released into nearby water bodies thus causing water pollution. Therefore, stringent government regulations have been laid on manufacturing of steel and related products.
Volatile cold rolled steel sheet prices
The prices of cold-rolled sheets are highly volatile and cannot be predicted. Therefore, it is not a reliable source of material all the time. Pre-planned decisions on cold rolled sheets cannot be made, since the prices are subject to change. This compels construction people to adopt to alternatives.
Lack of awareness on light steel framing technologies
Light steel framing techniques have been gaining popularity only in recent times. There are still many who are not aware of light steel framing techniques and therefore wouldn’t want to take the risk. People prefer conventional and trusted old alternatives over light steel frames.
Innovation, product development, acquisition and expansion are some of the key strategies adopted by players in the light steel framing market. In 2019, the market of light steel framing has been fragmented and the top five players accounting for 8% of the share. Major players in the Light Steel Framing Market are ArcelorMittal, Clark Dietrich Building System, Nippon Steel & Sumitomo Metal Corporation, JSW Steel Limited, Nucor Corporation, Armstrong World Industries Incorporation, Super Stud Building Products Incorporation, AK steel corporation, SSAB Americas, Magnitogorsk iron & steel works, Hadley Group among others.
In February 2017, ArcelorMittal and Votorantim S.A, signed an agreement wherein Votorantim was acquired by ArcelorMittal Brazil, with an annual crude steel capacity of 5.6 million tonnes and an annual rolling capacity of 5.4 million tonnes.
In late 2016, Baoshan and Wuhan completed their merger forming China’s leading iron and light steel framing company. The new Baowu Steel Group will have an annual production capacity of around 60 million tons, making it the world’s second major light steel framing maker after ArcelorMittal ISPA.AS.
In December 2017, Nippon Light Steel Framing & Sumitomo Metal Corporation (NSSMC) acquired Katakura Steel Tube Co., Ltd in an equity method and made it a subsidiary.
In 2017, ClarkDietrich Building Systems, the construction industry’s largest manufacturer of cold-formed steel framing products, had acquired Strait-Flex International, a leading provider of finishing solutions for interior drywall applications.
In early 2018, NSSMC completed the acquisition of the additional shares of common stock of Katakura Steel Tube Co., Ltd. NSSMC purchases Ovako’s shares and made it a fully-owned subsidiary, and also made Sanyo Special Steel a subsidiary.
Asia-Pacific dominates the light steel framing market owing to increasing construction activities in the commercial and industrial sectors of developing countries such as India and China.
The growth of light steel framing industry can be associated with growing need for infrastructure in developed countries and its government coming up with various housing schemes and other projects.
Increase in awareness about the merits of steel over the other conventional methods has given a boost to the steel industry.
The evolving technology in the present days is a blessing in disguise to the steel industry, as the technology can be used to enhance the properties of steel until it is being replaced with a substitute in the far future.
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