Vitesco Technologies signed a strategic cooperation agreement with Baosteel towards joint efforts on new materials based on high-grade non-oriented silicon steel. 

Germany-based Vitesco Technologies provides drive technologies and electrification solutions for mobility. High-grade non-oriented silicon steel, one of the cooperation targets, can be used in stator and rotor laminations for drive motors. While silicon steel, also known as electrical steel, only accounts for around 1% of the total steel industry by volume, its use in EV drivetrain motors is ramping up demand for this niche steel product.

The requirement for electrical steels in EVs together with governmental critical material policies like the IRA are breathing new life into some steel plants. Also in August, US Steel Corp is attracting acquisition interests despite financial concerns following investments to upgrade furnaces to electric arc furnaces and increase capacity to produce electrical steel. ArcelorMittal SA, the world’s second-largest steelmaker, is one of the companies considering a potential offer for US Steel Corp. This is a reversal in ArcelorMittal's exit trend from the US after selling operations to Cleveland-Cliffs, the union-preferred bidder for US Steel Corp.

The silicon market is split between ferrosilicon and silicon metal, with the latter typically gaining more attention from energy transition applications such as solar PV and batteries. Ferrosilicon, on the other hand, has had a relatively flat market for a decade and with the structural changes in Chinese steel production ahead, is poised to remain flat in the short term. There is, however, some glimpse of a demand growth returning with its use in stainless steel continuing to grow and now added to by electrical steel's faster growth market potential in electric vehicles – albeit from a low base.

Ferroalloy furnaces in China are expected to consolidate further as China’s steel industry matures through its plateau. This will see some smelters switch between different products to gain exposure to growth markets. While the attention is currently focussed on stainless steel alloys nickel and chromium, these are both import reliant and, in the case of nickel, have been starved from feedstock since Indonesia’s export bans.