Steel Market Share

Steel Market Share Analysis

The rising demand for electric vehicles is closely tied to environmental regulations aimed at reducing emissions from traditional vehicles. The European Chemicals Agency (ECHA) has implemented regulations targeting carbon and nitrogen oxide emissions, prompting an uptick in the production of electric vehicles.

In the realm of electric vehicle construction, aluminum has been utilized to reduce vehicle weight. However, its higher cost compared to steel has led manufacturers in the steel market to develop advanced high-strength steel (AHSS), which is both lighter and more cost-effective. This shift from aluminum to AHSS is notable in the production of electric vehicles, with AHSS being employed in battery protectors to ensure robust protection while keeping the vehicle weight low. For example, Tesla, a global leader in electric vehicles, introduced the Tesla Model 3, a smaller and more affordable model constructed using AHSS. This material is particularly suitable for small and lightweight vehicles, while aluminum remains more common in SUVs and light trucks where weight reduction is a greater priority. As a result, the use of AHSS is anticipated to rise in electric vehicles in the foreseeable future.

Several European countries, including Norway, the Netherlands, the UK, France, Spain, Denmark, Germany, and Switzerland, are actively embracing the production of electric vehicles. In 2017, Europe contributed to approximately 26% of the total global production of electric vehicles. Government initiatives and support further drive the demand for steel, as major players like Volkswagen AG, BMW, and Audi have proposed expanding electric vehicle production to meet emissions targets. Consequently, the surge in electric vehicle adoption to comply with environmental regulations presents lucrative opportunities for stakeholders in the European steel market.

Meanwhile, in Eastern European countries, major civil engineering construction projects heavily depend on state budgets and European Union (EU) funds for financing. In 2016, the civil engineering sector in this region experienced a slowdown due to a halt in EU financing in Hungary, Poland, and Bulgaria. Infrastructure projects, including railways and highways, came to a standstill, negatively impacting the construction market. However, the subsequent increase in EU investment in 2017 revitalized spending on infrastructure projects. Looking ahead, the expected rise in EU funding is anticipated to drive significant growth in civil engineering construction activities. This, in turn, will boost the demand for structural steel, providing substantial opportunities for market players in the years to come.