It is estimated that the global alloy market could reach $11.3bn by the year 2027, not too far away really. At present, the market value sits at $9.1bn so that growth would represent 3.2%, a healthy level, especially coming out of the current pandemic and how it has affected all industries. Alloy steel distributors are in demand in the US.
In 2020, US steel production decreased by 1% in March, back to 7 million metric tons. However, although this marks a decrease of 9% from March 2019, Total US steel production actually increased by 1.6% in 2019 to 88 million metric tons, up from 86.6 million metric tons in 2018. So Covid-19 is playing a part in slightly decreasing the size of the market and of course market growth so far this year.
Non-ferrous metal as a segment is expected to grow 3.7% and this would achieve $5.9bn by 2027. The pandemic has been taken into account with the superalloys segment now revised to be a growth of 2.8%. This particular segment actually accounts for 29.7% of the overall global high-performance alloys market.
So how do these figures measure up in the US market? At present, the US has 27% of the global market in 2020. Against that, China is expected to grow at 5.8% up until 2027. The actual high-performance alloys market for the US is currently estimated at $2.5bn in 2020. In contrast, China is expected to reach $2.4bn by 2027.
So what is alloy steel anyway?
For anyone wondering what alloy steel is and the differences, alloy steel is carbon steel combined with one or more elements – copper, chromium, aluminum, titanium, manganese, silicon and nickel. Ultimately, this adds extra hardness, flexibility and can also improve the ease of welding.
These different alloys can enhance steel in different ways. For example, chromium makes the steel harder, whereas molybdenum increases strength and ability to withstand light later. The reason it is commercially viable to produce alloy steel is increased hardness, less chance of corrosions and to look and it is a strong but flexible material for building with.
Market demand at present
The short-term demand has increased very slightly but overall, demand has dropped since 2019 and particularly over a 5-year period. In March 2020, consumption for steel increased by 1.2% from February to 7.8 million metric tons. Overall, demand has dropped 10% since 2019 and 10% overall from five years ago. However, if we go right back to April 2009 when steel demand hit a low level, it has increased 35% to now.
Who dominates the market vs. the US share of the market
Although China’s production increased by 5.6% from February to March. But back in 2019, it had decreased 44.4% from 2018. This figure looks even bigger when you examine the main global players. China has 54% of the market; then you have India, Japan and the US on 5% each. Then South Korea and Russia at 4%. So China’s production dwarf’s the next 3 biggest countries; with the current pandemic of Covid-19 and sanctions between the US and China, it may be that the demand for steel from the world’s biggest producer lessens slightly as the US could even look at their own production increases. Indeed, the US has looked at their own market losses and concluded that they posted a combined loss of $76 million for Q1, 2020. However, four out of the top five companies made net gains.
So Covid-19 has definitely not helped the industry but given that the US is still seeing an increase in how things looked back in 2009, there is still some cause for optimism. It’s very likely that more manufacturing will be done at home with much less reliance on buying steel from China (with 54% of the market).
Perhaps once the pandemic is fully under control in the US, there may be a big spike in demand with a gradual increase. Q2 and Q3 will show how those market changes affect not just the US but what is being imported too.