Electric Arc Furnaces Market Analysis 2026

Market Dynamics of the Electric Arc Furnace Market

Key Drivers of the Electric Arc Furnace Market.

• Increasing the application of steel scrap will help boost the market.

Steel waste is being used more often worldwide to reduce carbon emissions. By decreasing the requirement for the extraction of iron ore to produce steel, recycling steel waste increases the economic viability of the steel industry and reduces its environmental impact. As a result, there are notable reductions in CO2 emissions, water and energy usage, and air pollution. According to, CMC keeps more than 19 billion pounds of scrap metal out of landfills each year by using solely 100% recycled scrap steel as the main raw material in their steel production process.

Steel can be prepared using iron ore, steel, or steel scrap or in combination with other raw materials. The demand for steel scrap is significantly impacted by changes in iron ore prices.

Furthermore, to reduce their overall cost of manufacturing, firms have begun to use steel waste as their primary raw material source due to rising electricity and energy expenses. According to US Steel, about 5.2 million metric tonnes of scrap steel were recycled by US Steel in 2021 in accordance to reduce the problems.

(Source:https://www.ussteel.com/documents/40705/43725/USS_CSR21_Full_Report.pdf).

Steel may be recycled repeatedly without lowering the quality of the final goods produced. Consequently, throughout the forecast period, the market's expansion will be driven by an increase in the application
•    For instance, the World Steel Association states that 71 countries reported to the World Steel Association (world steel) 165.1 million tonnes (Mt) in May 2024, a 1.5% increase compared to May 2023.

(Source:https://worldsteel.org/media/press-releases/2024/may-2024-crude-steel-production/).

• Increasing production of direct reduced iron (DRI) will help the market to grow.

Coking coal is used in blast furnaces as a source of energy and carbon in the BF-BOF method of manufacturing steel. Another method of producing steel is called "direct reduction of iron," or DRI, which is produced by burning non-coking coal or natural gas and combined with scrap steel to make crude steel. The production of natural gas and non-coking coal has expanded significantly due to advancements in their respective extraction and mining technologies. It has aided in maintaining their cheap prices. As the cost of manufacturing decreases, the production of DRI typically increases as a result of low natural gas and non-coking coal. According to the report by GMK Center, global direct reduced iron (DRI) production has increased in the year 2023 by 7.4% as compared to 2022.

(Source:https://gmk.center/en/news/global-dri-production-increased-by-7-y-y-in-2023/#:~:text=Global%20direct%20reduced%20iron%20(DRI,of%20the%20total%20DRI%20production).

Furthermore, it is anticipated that the US, India, and Egypt will grow their respective shares of the DRI-electric arc furnace pathway in the steel sectors. Supply-side elements are also pushing DRI companies to invest in new DRI plants, such as the rise in natural gas exports from the US, Qatar, and Australia. Therefore, during the forecast period, the market's growth and trends will be driven by the anticipated increase in the share of scrap steel and DRI in the world's steel output.
•    For instance, according to the report of Midex, there is growth in the production of DRI. There are two types of DRI, cold DRI, and hot DRI, the production of CDRI has increased from 39Mt to 102.1 Mt in the last 20 years, and the production of HDRI has increased from 1.8 Mt in 2003 to 13.9 Mt in 2022.

(Source:https://www.midrex.com/tech-article/outlook-for-dri-production-and-use/).

Restraint of the Electric Arc Furnace Market

• Fluctuations in the demand for steel and the price of steel scrap will hamper the growth of the market.

The production of steel is declining globally, especially in North America and Europe, which is having a significant effect on the expansion of the global market for steel scrap. According to the Steel Orbis, Turkey imported 1.37 million MT of scrap from the US, up 9.2% year on year with the USA being the leading scrap provider for Turkey.

(Source:https://www.steelorbis.com/steel-news/latest-news/turkeys-scrap-imports-up-25-percent-in-january-april-1343419.htm#:~:text=In%20the%20given%20period%2C%20Turkey,mt%20of%20scrap%2C%20up%2016.4).

The expansion of the electric arc furnace (EAF) market will be adversely affected by the uncertainties in the steel demand. Due to Russia's invasion of Ukraine, many European countries have experienced severe economic downturns, which has had a detrimental impact on global steel output. The cost of steel scrap dropped in May 2022. As a result, the examples demonstrate how unpredictable the price of steel scraps is due to its dependence on several variables, including the output of steel products. Consequently, the profit margin of businesses involved in the electric arc furnace (EAF) industry will be adversely affected by the volatility of steel scrap prices. During the forecast period, these factors will hamper the market expansion. 
•    For instance, the report of Procurement Resource, states that the price of steel scrap has rose from 380 USD/MT in January 2023 to 448 USD/MT in March 2023. However, this has negatively affected the trend of the end-user sectors in the second quarter leading to a downfall of 352 USD/MT.

(Source:https://www.procurementresource.com/resource-center/steel-scrap-price-trends).

Impact of COVID-19 on the Electric Arc Furnace Market.

The pandemic has negatively affected the market. The pandemic has influenced the market through fluctuations in the demand pattern, changes in consumer behavior, and varying government regulations. The pandemic has also led to disruption in the supply chain and shutdowns have hit the end-users of the steel industry hard. The demand for electric arcs has declined significantly.  The post-pandemic has led to a slow recovery of the market affecting the growth potential of the electric arc furnace.    
•    For instance, according to the Research Gate, World crude steel production has reduced by 13 percent when compared to April 2019, in April 2020 the steel production was 131.1 million tonnes, and 148.8 million tonnes in May’20 which was 8.7% lower than compared to May 2019.

(Source:https://www.researchgate.net/publication/353783589_Impact_of_COVID_19_on_Steel_Industry_-_A_case_Study_of_RINL_Visakhapatnam_Steel_Plant).

Opportunities of the Electric Arc Furnace Market.

• Rising investment offers can attract the opportunity for the growth of the market

Throughout the projection period, the EAF industry's increasing investment is anticipated to present a profitable opportunity for market expansion. According to the ArcelorMittal in 2023, invested USD 67 million in a new electric arc furnace at its Belval site, with help from the Ministry of Economy. The new Belval electric arc furnace is one of the main projects covered by this Memorandum of Understanding. It will result in increased energy efficiency and a nearly 15% increase in Luxembourg's yearly production capacity of 2.5 million tonnes of steel. Arcelor Mittal Luxembourg factories will have adequate space with the installation of this new facility, which will replace the current EAF, which has been in service since 1997, and additional investments to be made in other parts of the Belval steel.

(Source:https://corporate.arcelormittal.com/media/news-articles/arcelormittal-invests-67-million-euros-in-a-new-electric-arc-furnace-at-its-belval-site-with-the-support-of-the-ministry-of-economy/).

Recent Development

•    On 2 June 2023, Mitsubishi Electric Corporation’s subsidiary ICPNICS, INC. announced that it has formally agreed to wholly acquire ICONICS UK, Ltd., which sells supervisory control and data acquisition (SCADA) software and develops related cloud applications.

•    On 18 December 2023, Nippon Steel Corporation (NSC) acquired US Steel and moved forward together as the best steel maker with world-leading capabilities.

An electric arc furnace (EAF) is a furnace that heats material using an electric arc. An electric arc furnace (the large cylinder) is being tapped rendering an exterior arc furnace. Electric furnaces are of various types and they are mostly used for the smelting of certain ores and also steel making. Increasing the application of steel scrap and increasing the production of direct reduced iron (DRI) will help the market to grow. Fluctuation in the demand for steel and the price of steel scrap will hamper the growth of the market. Fluctuations in the demand for steel and the price of steel scrap will hamper the growth of the market. Asia-Pacific is dominating the market of electric arc furnaces and the North American region is the fastest-growing region in this market.

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