Steel Stands Strong in Electric Vehicle Growth

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electric vehicle charging station
Michael Flippo/Adobe Stock

Some base metals are poised to become hot commodities for their anticipated use in electric vehicles (EVs).

As demand increases and technology presses forward, certain metals could become big winners.

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Steel remains one of the most important industrial metals for the automotive industry. Currently, steel goes into the vehicle structure, such as the main body structure, hang-on panels (such as the door and hood), wheels, chassis and a variety of internal structures, such as seats. This means that most of the structure of the vehicle comes from steel.

Although some automakers have moved toward aluminum due to its lightweight properties, aluminum has a long way to go before it starts to eat into steel’s share.

The Demand for Steel

Steel also has a new life in the EVs revolution related to the electric propulsion system.

Despite the mania over the battery market, batteries are not the only relevant part of the electric propulsion system in EVs. Electrical steels get the power from the battery and transform it into mechanical energy (which allows the movement on the road).

Tata Steel forecasted steel demand based upon different scenarios regarding the growth of EVs in its report, titled “Charging towards a sustainable future?”According to the report, forecasted steel demand for structural steel, plated steel and electrical steels will grow considerably through 2050.

Source: “Charging towards a sustainable future?” Tata Steel

Structural steel takes the lion’s share, and will continue growing with the introduction of EVs. Moreover, electrical steel and plated steel demand will become stronger with the EVs.

This year, plate prices have performed the worst compared to other steel forms. However, prices increased this week and the increase appears sharp, partly due to low service center volumes.

Source: MetalMiner data from MetalMiner IndX(™)

U.S. plate exports increased by 18.8% in October, and are up by 53.3% compared to last year’s levels.

As For Today’s Steel Prices…

Despite the EV market sentiment, domestic steel momentum held flat during Q3.

Steel momentum has shifted and prices now show some upward momentum (MetalMiner recently assessed steel prices).

Source: MetalMiner data from MetalMiner IndX(™)

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HRC prices increased again this week, together with the other steel forms. The latest prices released also show a continuation of the uptrend.

Could this be the beginning of a new rally for steel? Buying organizations may want to subscribe to our Monthly Outlook or take a free two-month trial to identify buying opportunities.

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