Market Trends of Stainless Steel Industry
Building and Construction Segment to Dominate the Market
- Stainless steel plays a pivotal role in architecture, construction, and building. Its superior corrosion resistance makes molybdenum-containing stainless steels the preferred choice for architectural design and structural engineering firms, especially in more corrosive environments.
- Stainless steel is rapidly becoming the go-to material in the construction industry. Beyond its use in structural elements like beams and columns, stainless steel finds applications in railings, roofing, lifts, staircases, swimming pool shades, and even atriums.
- Oxford Economics forecasts a robust growth trajectory for global construction output, projecting an increase from over USD 4.2 trillion today to a staggering USD 13.9 trillion by 2037, predominantly fueled by the construction powerhouses of China, the United States, and India.
- Both Asia-Pacific and North America are experiencing a surge in residential construction. In Asia-Pacific, countries like India, China, the Philippines, Vietnam, and Indonesia are at the forefront. Meanwhile, North America's residential construction is buoyed by a growing population, rising immigration, and the trend towards nuclear families.
- With housing markets on the rise, the Asia-Pacific region, spearheaded by China and India, is set to lead the global surge in housing construction.
- China's construction sector, as reported by the National Bureau of Statistics (NBS), grew by 6.5% in actual value in 2023. The sector's economic contribution rose by 7.2% year-on-year in the first nine months. Further, the construction output value reached CNY 31.59 billion (~USD 4.46 billion), marking a 1.3% increase from the previous year.
- Highlighting India's momentum, the National Real Estate Development Corporation (NAREDCO) reports that the top 7 cities collectively completed 4.35 lakh units in 2023, with 2024 poised for a substantial uptick. Further underscoring this trend, County Group, a prominent Noida-based real estate developer, is set to unveil over 4 million sq. ft across three ambitious housing projects this year.
- The United States dominates North America's construction industry, with Canada and Mexico also making notable investments. Data from the US Census Bureau reveals a 4.46% rise in new housing units in 2023, totaling 1,452 thousand units, up from 1,390.5 thousand in 2022.
- Germany's robust economy is driving demand for commercial spaces. High-quality, ESG-compliant office buildings are seeing rising prime rents, signaling strong commercial construction interest. In Q3 2023, about 246,000 square meters of office space were completed, with projections suggesting a total of 1.8 million sq. m by 2024. Retail space development, particularly in shopping centers, experienced steady growth in 2023.
- Brazil's housing ambitions are bolstered by government initiatives. The Ministry of Urban Affairs highlights a focus on affordable housing and urban renewal. With revised regulations for the Minha Casa, Minha Vida (My Home, My Life) program, aimed at lowering interest rates and boosting property purchase subsidies, the goal is to construct two million housing units by 2026.
- Saudi Arabia's housing sector is on the brink of a boom. As per the dataf from the Ministry of Municipal and Rural Affairs and Housing, , the country is expected to see the construction of 300,000 residential units by the end of 2025. Further, in September 2023, the government unveiled housing projects exceeding SAR 65 billion (~USD 17.3 billion), further energizing the construction sector.
- Given these dynamics, the building and construction segment is poised to retain its leading position in the market during the forecast period.
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Asia-Pacific Region to Dominate the Market
- Asia-Pacific region has seen robust growth in the stainless steel industry, with countries like China and India leading in consumption. This surge is primarily fueled by rising demands from various sectors, including automotive & transportation, building & construction, metal products, electrical machinery, and mechanical engineering.
- China leads the global construction market, accounting for 20% of worldwide investments. With an anticipated spend of nearly USD 13 trillion on buildings by 2030, creating a positive outlook for the market studied.
- In response to a struggling economy, still reeling from pandemic-related challenges, Chinese governors are ramping up budgets for major building projects by nearly 20% this year. Over two-thirds of China's regions have committed to significant projects, including transportation infrastructure and industrial zones, with a combined budget exceeding CNY 12.2 trillion (USD 1.8 trillion) for 2024.
- As per the data from the China Electricity Council highlights that in 2023, the high-tech and equipment manufacturing sectors saw a 11.3% year-on-year increase in electricity consumption, outpacing the overall manufacturing industry's growth by 3.9 percentage points. Notably, the electrical g quarterly growth rates and a two-year average exceeding 20%.
- Additionally, figures from the Department of Commerce (India) indicate that in FY 2024, India's exports of electrical machinery and equipment surged to nearly USD 12.37 billion, up from USD 10.96 billion the previous year. This growth is anticipated to bolster demand in the electrical machinery sector, subsequently benefiting the studied market.
- India is set to witness a 70% increase in affordable housing availability in 2024. As reported by Invest India, the nation's construction industry is on track to hit USD 1.4 trillion by 2025. With forecasts suggesting that over 30% of the population will be urban dwellers by 2030, there's a pressing need for 25 million more mid-end and affordable housing units. Recent reforms, such as the Real Estate Act, GST (goods and services tax), and REITs, (real estate investment trusts), aim to expedite approvals and strengthen the construction industry, further propelling market growth.
- In India, data from the Society of Indian Automobile Manufacturers (SIAM) indicates that from July to September 2024, the total production of passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle reached 8.07 units. Specifically, sales for passenger and commercial vehicles were 1.05 million and 0.22 million units, respectively. Consequently, this uptick in automobile production is poised to bolster demand in the stainless steel market.
- South Korea boasts a mature automotive industry with notable brands like Hyundai, Renault, Samsung, and Kia. Projections from the Automobile Manufacturers Association and The Korea Automobile Research Institute anticipate a 1.0% rise in domestic automobile production for 2024, reaching 4.36 million units. This growth is expected to drive demand in the studied market.
- Given these dynamics, the Asia-Pacific stainless steel market is poised for steady growth in the coming years.
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