Analysis of the Current Status and Development Trends of the Silicon Steel Industry

Silicon steel is known as the "pearl" in the steel industry, renowned for its complex production process and high technological content. In recent years, China's silicon steel industry has achieved a leap from following to leading, with a production capacity of 18 million tons. The proportion of high-grade products has significantly increased, and the export volume has reached a historical high.

The four major advantages of the silicon steel industry

Significant improvement in production capacity and technological level: After entering the 21st century, China's silicon steel production line design and equipment manufacturing capabilities have rapidly improved, and large enterprises have increased their investment, resulting in a rapid increase in cold-rolled silicon steel production capacity. As of the end of 2024, the production capacity of cold-rolled silicon steel in China has reached about 18 million tons, including about 15 million tons of non oriented silicon steel and about 3 million tons of oriented silicon steel.

Continuous optimization of product structure: Since 2016, the production of silicon steel has steadily increased, with an average annual growth rate of 8.1%. Especially the proportion of high-grade silicon steel has significantly increased, with the proportion of oriented silicon steel in the total output increasing from 13.0% to 18.3%, and the proportion of high-grade and high-efficiency non oriented silicon steel also increasing from 18.9% to 31.2%.

Enhanced international competitiveness: China's silicon steel has not only achieved a historic transformation from net imports to net exports, but also maintained sustained growth in export volume. In 2024, the export volume of silicon steel reached 1.447 million tons, with a net export volume exceeding 1 million tons for the first time, demonstrating China's strong competitiveness in the international market.

The modernization level of the industrial chain has been improved: China's silicon steel industry chain has formed a relatively complete system, and the production capacity of the entire process from smelting to finished products has been greatly enhanced. In addition, downstream users are gradually extending to upstream material production, promoting the continuous improvement of the quality and level of silicon steel supply.

Market demand and supply analysis

Although the demand for silicon steel market remains strong, especially in the fields of new energy, power grid upgrading, and motor energy efficiency improvement, the growth rate of the supply side is significantly faster than that of the demand side. It is expected that the demand for high magnetic induction silicon steel will increase by over 500000 tons annually in the coming years, but at the same time, the rapid expansion of silicon steel projects may lead to overcapacity.

On the demand side: With the rapid development of renewable energy generation, energy efficiency improvement of power transformers, and the new energy vehicle market, the demand for high-grade silicon steel will continue to grow. Especially with the rapid growth of wind and photovoltaic installed capacity, the demand for thin specification high-grade non oriented silicon steel will further expand.

On the supply side: According to incomplete statistics, since 2024, China has added a total of 11.5 million tons of processing capacity to completed, under construction, and planned silicon steel projects. If all these projects are implemented, the production capacity of silicon steel will increase significantly, leading to an imbalance between market supply and demand, especially for high-grade silicon steel, which may enter the "red ocean" market and intensify competition.