Development Opportunities for Silicon Steel Materials

New Development Opportunities for Silicon Steel Materials

Overview

Silicon steel materials are poised for significant development due to recent shifts in energy efficiency standards and market trends.

Energy Efficiency Standards

New regulations in China have increased energy efficiency standards across various sectors. Recent updates include:

Household Refrigerators: GB12021.2-2015 outlines power consumption limits.
Room Air Conditioners: GB21455-2019 sets energy efficiency grades.
Motors: GB18613-2020 imposes stricter standards, with revisions to GB30254-2013 for high-voltage motors expected by 2025.

In June 2023, China introduced GB/T10228-2023, a recommended standard for new energy transformers, effective December 1, 2023. Additionally, the GB20052 standard for power transformers will be updated to include new energy transformers by February 1, 2025.

Global Transformer Market Outlook

The global transformer market is expanding, particularly in the Asia-Pacific and North American regions. Key points include:

Market Growth: The market is expected to grow by 7% to 9% in 2023, with continued steady growth over the next five years.
Supply and Demand: Asia-Pacific and North America are leading the demand, with China, Mexico, South Korea, and Turkey as major exporters.
Competitive Landscape: Multinational companies hold 20% to 30% of the market share.

Technological trends emphasize high efficiency, support for new energy, intelligence, digitalization, and sustainable development. Oriented silicon steel is advancing towards higher grades.

U.S. Transformer Demand

According to a U.S. Department of Energy report, transformer demand in the U.S. and worldwide was 1,300 and 12,500 units, respectively, in 2020. By 2027, these figures are expected to rise to 2,800 and 23,400 units. The U.S. faces challenges such as limited domestic production capacity, high import dependence, extended delivery cycles, and rising costs. However, these challenges also present opportunities for international expansion.

European Power Grid Opportunities

The European Commission’s “Grid Action Plan,” announced in December 2023, proposes a €584 billion investment to upgrade the European power grid. By 2030, a significant portion of the low-voltage lines will be over 50 years old. Key opportunities include:

Aging Distribution Networks: Equipment in developed countries is outdated, necessitating upgrades.
New Energy Grid Connections: A substantial increase in renewable energy sources requires grid connections.
Rising Electricity Consumption: Clean transportation, heating, cooling, and industrial electrification will increase demand by about 60% by 2030.
Charging Station Infrastructure: The EU mandates zero-emission vehicles by 2035, requiring improved charging infrastructure.
Cross-Border Grid Upgrades: Planned enhancements will double cross-border transmission capacity by 2030.

Future Trends in Silicon Steel

Predictions for the silicon steel market include:

Transformers: By 2025, China is expected to produce 2.5 billion kilovolt-amperes of transformers, with 2 million tons of oriented silicon steel needed. By 2030, these figures are projected to reach 3.4 billion kilovolt-amperes and 2.74 million tons, respectively.
New Energy Vehicles: In 2025, the demand for high-grade non-oriented silicon steel in China is expected to reach 2.04 million tons, rising to 3.26 million tons by 2030.

Silicon steel development will focus on thin specifications, ultra-high magnetic induction, low iron loss, high frequency, and efficiency. Advances in low-carbon, green silicon steel and intelligent manufacturing are anticipated, with rapid self-bonding cores driving motor technology due to their high strength, precision, low noise, and high efficiency.

Market Competition

Future market competition will be intense, with a focus on quality, cost, and integrity. The silicon steel industry in China will continue to play a significant role globally, contributing to technological advancements and sustainable development.