Electric Arc Furnace - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

The electric arc furnace market size was valued at USD 1.67 billion in 2025 and is estimated to grow from USD 1.76 billion in 2026 to reach USD 2.33 billion by 2031, at a CAGR of 5.67% during the forecast period (2026-2031). This report is segmented by Furnace Type (DC Arc Furnace and AC Arc Furnace), Capacity (Below 100 Tons, 100-300 Tons, and Above 300 Tons), Application (Steelmaking, Non-Ferrous Metal Smelting, Ferroalloy Production, and Other Applications), and Geography (Asia-Pacific, North America, Europe, South America, and Middle East and Africa). The Market Forecasts are Provided in Terms of Value (USD).

Global Electric Arc Furnace Market Trends and Insights

Decarbonization of Primary Steelmaking

Carbon-emissions requirements are changing how steelmakers assess long-lived furnace assets. Electric arc furnaces provide a near-term route for replacing part of the emissions profile associated with primary steelmaking. ArcelorMittal confirmed a EUR 1.3 billion (approximately USD 1.55 billion) investment in a 2-million-metric-ton electric arc furnace at Dunkirk, France, with commissioning targeted for 2029. The facility is designed for 2 million tons of annual output and is expected to produce 0.6 tons of carbon dioxide per ton of steel, while Energy Efficiency Certificates support 50% of the investment. JFE Steel announced in April 2025 that it would invest JPY 329.4 billion (approximately USD 2.2 billion) in a 2-million-ton electric arc furnace at Kurashiki, Japan. The electric arc furnace market benefits when operators first add supporting equipment to existing plants and later move toward full furnace replacement. A 2026 study found that China’s pathway toward a 97% reduction in steel-sector emissions by 2060 requires facility retirements and faster retrofits before 2040.

Expansion of Scrap-Based Steel Production

The availability and recovery of steel scrap are becoming more important to electric arc furnace planning. Higher scrap volumes can support a larger share of steel output from electric routes, but they also increase the need for reliable collection and sorting systems. China consumed 214 million tons of scrap in 2024, and 30% of that volume entered the electric arc furnace. The electric arc furnace market will therefore depend not only on furnace orders but also on the development of feedstock networks. Producers converting integrated sites may combine scrap with direct reduced iron to meet charge-quality requirements. This approach supports demand for larger vessels that can process mixed burdens at high throughput. The China Iron and Steel Association established an electric arc furnace steelmaking sub-association in February 2025.

Electricity-Price Volatility and Grid-Connection Constraints

Electric arc furnaces require a substantial and dependable electricity supply. The energy cost represented 10%-15% of steel production costs under stable grid conditions. Large furnaces can also create flicker, harmonic distortion, and reactive power demand that complicate grid connection. Primetals Technologies stated in February 2026 that its Active Power Feeder uses modular multilevel converter technology to stabilize full-power furnace operation while reducing flicker and energy use. The need for such equipment adds to project cost and can extend connection approval timelines by 6-12 months. Electricity price uncertainty also makes it harder to assess the operating case for a new furnace. ArcelorMittal’s June 2025 decision to withdraw from planned direct reduced iron and electric arc furnace projects in Germany showed that public support alone may not resolve the financial burden of a large conversion.

Other drivers and restraints analyzed in the detailed report include:

• Rising Demand for Flexible Steelmaking Capacity
• Retrofitting of Existing Steel Plants
• Scrap-Quality Variability and Contaminant Management

Segment Analysis

The DC arc furnace held 56.68% of the electric arc furnace market share in 2025. Its position reflects demand for stable operation and lower electrode consumption in large-scale projects. The direct-current furnaces consumed 350-380 kilowatt-hours per ton of steel, compared with 380-420 kilowatt-hours for alternating-current units. A DC design uses 1 graphite electrode rather than 3 electrodes. It also produces a more stable arc and lower grid flicker. These operating features can reduce the need for power-quality mitigation where grid standards are strict. The DC arc furnace is projected to advance at a 6.23% CAGR through 2031, which supports continued growth in the electric arc furnace market size for this type.

SMS group’s EDGE DC platform was selected for Hybar’s twin CMT 550 configuration in Arkansas. DANIELI & C. S.p.A. also supplied its Zerobucket DC furnace for a project at Henan Jiyuan Iron & Steel in China. These examples show how suppliers are applying direct-current architecture to modern minimill layouts. The AC arc furnace remains relevant for high-alloy specialty steel, smaller regional mills, and plants with established alternating-current equipment. SMS group received an order for a 185-metric-ton AC furnace for Saarstahl in Völklingen, Germany, with a 300 megavolt-ampere transformer. Furnace selection will continue to reflect local grid requirements, charge chemistry, and the cost of changing installed equipment.

Complete Report Scope:

• By Furnace Type
  • DC Arc Furnace
  • AC Arc Furnace
• By Capacity
  • Below 100 Tons
  • 100-300 Tons
  • Above 300 Tons
• By Application
  • Steelmaking
  • Non-Ferrous Metal Smelting
  • Ferroalloy Production
  • Other Applications
• By Geography
  • Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Rest of Asia-Pacific
  • North America
    • United States
    • Canada
    • Mexico
  • Europe
    • Germany
    • United Kingdom
    • France
    • Italy
    • Rest of Europe
  • South America
    • Brazil
    • Argentina
    • Rest of South America
  • Middle East and Africa
    • Saudi Arabia
    • South Africa
    • Rest of Middle East and Africa

Geography Analysis

Asia-Pacific held 40.17% of the electric arc furnace market share in 2025 and is projected to advance at a 6.66% CAGR through 2031. JFE Steel committed JPY 329.4 billion (approximately USD 2.2 billion) for its Kurashiki project in April 2025. NIPPON STEEL CORPORATION also announced JPY 869 billion (approximately USD 6 billion) in electric arc furnace investments across 3 Japanese plants in May 2025. POSCO completed a 2.5-million-ton furnace at Gwangyang in June 2026. These commitments support the region’s installed base and project pipeline. Tata Steel’s planned 750,000-metric-ton scrap-based facility in Ludhiana reflects a localized model that targets customers within a 300-kilometer supply radius.

North America is building capacity that is closely linked to automotive steel demand. Hyundai Steel’s Louisiana facility is designed to produce 2.7 million tons of automotive steel plates annually. ArcelorMittal’s Calvert, Alabama, furnace reached full capacity by mid-2026 and produces 1.5 million tons per year. Europe is pursuing a deeper shift as producers respond to carbon regulation and the Carbon Border Adjustment Mechanism. Tenova’s Duisburg project, Tata Steel UK’s Port Talbot project, and ArcelorMittal’s Dunkirk project represent large blast furnace replacement programs. The electric arc furnace market size in Europe will still be affected by power prices, regulatory conditions, and the timing of public support. ArcelorMittal’s June 2025 cancellation of planned German projects showed that investment schedules may not progress evenly.

South America has an established minimal base that supports demand for 100-300 ton furnaces serving construction markets. Brazil provides a stable foundation for this activity, while Argentina and other Mercosur economies can add demand as infrastructure spending improves. The Middle East and Africa have a smaller electric arc furnace market share, but their project pipeline is developing. Saudi Arabia’s Vision 2030 and domestic steel production goals are supporting greenfield planning. Competitive renewable energy could support hydrogen-based direct reduced iron and electric arc furnace projects in the region. South Africa’s ferroalloy production also supports demand from specialized melting applications. Steelmakers in the region may give greater attention to lower-carbon production when supplying customers exposed to European carbon requirements.

List of Companies Covered in this Report:

• CHNZBTECH Co., Ltd.
• DANIELI & C. S.p.A.
• Electrotherm
• HANI Metallurgy
• INTECO melting and casting technologies GmbH
• JP Steel Plantech Co.
• NIKKO INDUSTRY CO., LTD.
• Paul Wurth IHI Co., Ltd.
• Primetals Technologies
• SARRALLE
• SMS group GmbH
• Tenova S.p.A.
• Xi'an Taoyuan Metallurgical Equipment Engineering Co., Ltd
• Xiye Tech Group Co., Ltd.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support