Electric Arc Furnace Market - Forecasts from 2024 to 2029

Electric Arc Furnace Market - Forecasts from 2024 to 2029

The electric arc furnace market will reach US$1,684.849 billion in 2029 at a CAGR of 5.64% from US$1,280.556 million in 2024.

The electric arc furnace is anticipated to show steady growth during the forecast period. This industrial equipment utilizes electricity to generate an electric arc that melts and purifies metals. The arc is generated between two electrodes made of carbon and graphite. This arc has the capability to generate temperatures of 3500° Celsius.

Electric arc furnaces are utilized in the manufacturing process of metal products like steel, aluminum, copper, lead, and other metal products. The benefits of using electric arc furnaces include their flexible nature, efficiency in the production of steel by reducing carbon emissions, and reduced capital investment. Increased demand for steel, increased price of metallurgical coal, and the growing prevalence of investments in electric arc furnaces are driving the electric arc furnace market growth.

Electric Arc Furnace Market Drivers

Increased demand for steel drives the electric arc furnace market growth.

The increasing demand for steel is the primary driving factor for electric arc furnace market growth. Steel is a metal commonly used in a wide variety of sectors and fulfills the need by establishing a strong presence in the fields of construction, automobiles, and infrastructure development. Steel production is influenced by factors like urbanization and industrialization. The electric arc furnace is the main method used in steel production due to its flexibility and enhanced efficiency.

As compared to the traditional blast furnace method of producing steel, electric arc furnaces proposed quicker production, which means the electric furnace can boil the metal easily. For instance, according to an article by the World Steel Association in January 2024, the global crude steel production in 2023 was 1,888.2 metric tons. In India, the production rate as of 2023 was 140.4 MT as compared to 2022; there is a significant rise of 11.8% in steel production
Increased price of metallurgical coal propels the electric arc furnace market growth.

The variations in the price of coal are the primary driving force behind the electric arc furnace market growth. It is a known fact that traditional blast furnaces require coal as a raw material to produce metal from it. The fluctuations in the price of the coal and expenses incurred to produce steel in the old traditional method will influence the electric arc furnace due to its reduced cost and effectiveness.

The electric arc furnace does not rely only on a single raw material like traditional blast furnaces. These arcs require scrap steel and other metallic parts to produce the steel. These scrap metals are always available, making them an economical choice for manufacturers.
The growing prevalence of investment in innovative electric furnaces enhances the market growth.

Increased investment in creating innovative electric furnaces that reduce carbon emissions and enhanced investment in the research and development sector drive the market of electric arc furnaces. The aim of these R&D investments is to produce better, more durable, and productive electric arc furnaces in the future. These increased investments will influence the manufacturing of more electric arc furnaces, which can influence the manufacturers to produce more steel.

The investment criteria emerge as one of the loops created over the market by providing sustainable electric arc furnaces that would benefit both manufacturers and the environment. For instance, in June 2023, ArcelorMittal invested 67 million euros in its Belval site. The new Belval electric arc is an important project for the company as it focuses more on efficiency and increased production output, projected to be 2.5 million tons per year.

Electric Arc Furnace Market – Geographical Outlook

The Asia Pacific region is projected to rise.

Asia Pacific is anticipated to account for a significant share of the electric arc furnace market due to various factors. The region has a renowned steel manufacturer, and the steel produced is used in multiple industries to produce several materials. Regions like China, India, and Japan are surging toward urbanization and industrialization. This requires more steel production for infrastructure development and construction purposes, affecting the region's electric furnace market growth. Increased investment in the region will drive the market of electric arc furnaces in the future days.

For instance, in January 2024, Tata Steels announced an investment of 1.25 billion (British pounds) in electric arc technology in Port Talbot. This investment is made to transition traditional blast furnaces into green steel manufacturing.

Electric Arc Furnace Market Restraints
Increased initial capital cost curbs the electric arc furnace market growth.

Compared to traditional blast furnaces, electric arc furnaces cost more due to their enhanced properties and benefits for producing steel. This introductory investment will be the challenge for the wider adoption of electric arc furnaces.
Growing environmental concerns hinder the electric arc furnace market growth.

The electric arc furnace can reduce the carbon footprint as compared to traditional blast furnaces, but during the initial operations, it still emits carbon and other particles like nitrogen oxides and sulfur oxides.

Electric Arc Furnace Key Industry Updates
November 2023: The SMS group, a renowned steel maker in Sweden, is building a new electric arc furnace for steel manufacturing. For SSAB, the product can utilize renewable sources and recycle raw steel materials to manufacture the best quality and environment-friendly steel.
December 2023: Nippon Steel Corporation acquired U.S. Steel. This move benefits Nippon Corporation by making it the frontrunner in steel manufacturing. It also enhances their worldwide presence, and their technical knowledge in the market helps them become the region’s top contender for steel makers.

Electric Arc Furnace Market Players and Products:

FastArc: This product offered by Danielli’s is an innovative technology in electric arc furnaces. The technology is capable of melting the material quickly and consuming less energy.

The Electric Arc Furnace market is segmented and analyzed as follows:

By Type
DC Arc Furnace
AC Arc Furnace
By Application
Non – Ferrous Metal
Ferrous Metal
By Capacity
Up to 100 Tons
100-200 Tons
200 – 300 Tons
300 – 400 Tons
More than 400 Tons
By Geography
North America
United States
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
United Kingdom
Germany
France
Italy
Spain
Others
Middle East and Africa
Saudi Arabia
UAE
Others
Asia Pacific
Japan
China
India
South Korea
Taiwan
Thailand
Indonesia
Others