Soft Magnetic Material Market Size, Share & Trends Analysis Report By Application (Motors, Transformers, Alternators), By Product (Electrical Steel, Soft Ferrite, Permalloys), And Segment Forecasts, 2020 - 2027

Report Overview

The global soft magnetic material market size was valued at USD 19.23 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 3.9% from 2020 to 2027. Growing power distribution coupled with increasing demand for motors in various applications especially in medical equipment is anticipated to propel market growth. The market growth is further propelled by the innovations in the development of harvesting renewable energy, rising investments in the power distribution sector, and growing demand for electric vehicles. For instance, in 2019, the European Investment Bank agreed to fund energy efficiency and renewable energy projects across the globe worth €1.5 billion. Increasing investments in electric vehicles manufacturing, power transmission sector, medical equipment production are propelling production of motors, transformers, and generators in the U.S., which is boosting the demand for soft magnetic materials in the country.

For instance, in July 2019, Hydro-Québec announced an investment of USD 85 million for securing the growth of Dana TM4 in the electric powertrain sector. Dana TM4 is a joint venture company engaged in designing and manufacturing electric motors. Magnetic materials can be divided into soft, semi-hard, and hard, where the demand for soft magnetic materials persists owing to their low coercivity, high permeability, electrical resistivity, corrosion resistance, formability, ease of magnetization, and usable temperature range. Applications of soft ferromagnetic magnets are mainly in electric circuits, where they are used for amplifying the magnetic flux density in a magnetic field, generated by electric currents. As a result, these are largely found in applications related to electric power, relays, inductors, electromagnets, microwaves, and reception of radio signals.

The power sector is a key end-user for motors, which is anticipated to witness growth owing to the rising population, rapid infrastructural development, electricity reaching remote locations in developing nations, and rising manufacturing activities. For instance, in 2018, the demand for power increased by 8% in India. In addition, government initiatives such as DDUGJY, IPDS, and progressive measures for improving distribution and increasing power generation capacity is further anticipated to augment growth in the sector, which is expected to augment motors demand and eventually of soft magnetic materials during the forecast period.

The COVID-19 pandemic has severely affected various markets including soft magnetic materials, in terms of price and supply. However, the pandemic has also augmented the need for medical equipment like ventilators, which make use of motors for regulated airflow, high torque density, proper control, and less noise. The demand for ventilators is accelerating because of rapidly rising coronavirus patients in the world, which is anticipated to augment demand for motors and eventually market growth.

Application Insights

Electric motors held the largest revenue share of over 50% in 2019. Electric motors find applications in several end-use industries be it electric transmission, consumer electronics, electric vehicles, and medical equipment. Medical equipment and devices such as high-quality pumps, infusion pumps, hemodialysis machines, compressors, respirators, centrifuges, scanners, and others make use of small electric motors.

Electric motors hold vital significance in the soft magnets market as they are being used for past couples of centuries in various applications be it household appliances, industrial drives, or transportation. Their electricity consumption costs billions and hence, a slight percentage of improvement in efficiency can lead to a huge amount of savings and help reduce carbon dioxide significantly. As a result, magnets both permanent and soft are used in electric motors owing to the small size and lightweight characteristics with no compromise on required torque and power needed for actuation and transportation applications.

Transformers is the second leading application segment of the soft magnetic material market, where soft magnetic materials find application in transformer cores. Growth in the transformer industry, which can be witnessed with several investments, is expected to augment the market growth. For instance, in December 2019, Hyosung Heavy Industries (HICO) announced about buying Mitsubishi Electric Power Products Inc. plant in the U.S. and will make an investment worth USD 86.9 million. HICO will be producing core-form power transformers at the facility.

Product Insights

Based on the product, the market has been segmented into electrical steel (silicon-iron alloy), ferrites, permalloys (nickel-iron alloys), and others. Electrical steel accounted for the highest revenue share of over 60.0% in 2019. Iron-silicon alloys find application in transformer cores, since, silicon helps in increasing electric resistivity and reducing the length of magnetization.

Increasing demand for electrical steel is compelling manufacturers to boost their production capacity. For example, in September 2019, Baosteel announced about building a manufacturing line for high-grade non-oriented silicon steel for meeting increasing demand from industries like new energy vehicles. The trial production is expected to begin at the end of 2021 and final by June 2023.

Ferrites was the second largest product segment of the market in 2019. Manganese-zinc and nickel-zinc are examples of soft ferrites. Manganese-zinc ferrites find applications in magnetic cores in noise filters, choke coils, and transformers because they require high saturation flux density and permeability. Nickel-zinc ferrites are used in high-frequency applications, but they are avoided in transformers that switch power supplies because they are not efficient in maintaining low power loss. Also, soft ferrites provide limited saturation flux density compared to electrical steel, which results in their low volume share in their market.

Regional Insights

North America was the third-largest regional segment accounting for a revenue share of over 15.0% in 2019. The growth is majorly from the U.S. The country is a major consumer of electric motors, which is extensively used in several industrial applications such as pumping, compressed air, fans, refrigeration, material processing, and handling.

Although the industrial production declined in 2019, which elongated further due to COVID-19, the country witnessed slight relief in May 2020, when certain sectors such as consumer goods, business equipment, transit equipment, defense and space equipment, and construction supplies reported gains as they resumed partial operations. Increasing industrial activities is anticipated to propel the demand for electric motors and eventually soft magnetic materials over the forecast period.

Europe constituted a major share of the market in 2019. Increasing investments in power distribution are one of the factors attributable to the large share of the European region. For example, in December 2019, Akkuyu Nuclear JSC and TEIAS signed the Republic of Turkey Transmission Grid Connection Agreement, where the total length of high voltage lines will exceed 1,000 km and the power generated will be transmitted through 400 kV power lines to 6 transformer substations.

Asia Pacific held the largest share of the market in 2019 and this trend is expected to continue over the forecast period. The share is owing to a growing population, accelerating demand for electricity, rising investments, and government initiatives in developing countries. For instance, the power sector of Myanmar is one of the largest beneficiaries of FDI as the country has one of the lowest electrification rates in Asia and hence, has huge potential to expand power capacity.

Increasing demand for electricity has been driving the demand for motors and transformers across the Asia Pacific. The demand is prominent in developing economies that are putting more emphasis on manufacturing in the country itself. For example, in 2019, WEG announced its plan to produce low voltage electric motors in India. The company’s new unit is expected to start in 2021 in Hosur, which is worth an investment of USD 20 million. The plant is anticipated to have a production capacity of 250 thousand electric motors per annum. Increasing the production of motors is anticipated to boost soft magnetic materials demand over the forecast period in the country.

Key Companies & Market Share Insights

The market is highly competitive with the presence of various players in the market. The rivalry has been compelling market players to invest in research and development activities in order to boost technological advancements and product innovations. For example, in May 2020, the Scientists at the International Advanced Research Centre for Powder Metallurgy & New Materials came up with a new process for realizing iron-phosphorus (Fe-P) based soft magnetic alloys, for the automotive industry. The wrought FE-P alloy made by the process has characteristics superior to silicon steel and shall be valued at a low cost as well. The process is expected to offer a strategic edge to the Indian steel manufacturers amidst rising emphasis on the development of the electric vehicle industry. The alloy is under trial and testing as of May 2020. Some of the prominent players in the soft magnetic material market include:

• Arnold Magnetic Technologies

• GKN Sinter Metals Engineering GmbH

• Hitachi Metals Group

• JFE Steel Group

• Mahindra CIE

• MATE CO., LTD

• Meyer Sintermetall AG

• Sintered Specialties, LLC

• Steward Advanced Materials LLC

• VACUUMSCHMELZE GmbH & Co. KG

Soft Magnetic Material Market Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global soft magnetic material market report on the basis of application, product, and region:

• Application Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Motors

  • Transformers

  • Alternators

  • Others

• Product Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • Electrical Steel

  • Ferrite

  • Permalloys

  • Others

• Regional Outlook (Volume, Kilotons; Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • Italy

    • Turkey

  • Asia Pacific

    • China

    • Japan

    • South Korea

  • Central & South America

    • Brazil

  • The Middle East & Africa