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Tool Steel Market to Reach USD 10.54 Billion by 2031 Driven by Booming Manufacturing and Construction Sectors

The global Tool Steel Market value was USD 6.32 Billion in 2023, is expected to witness significant growth, driven by the Growing manufacturing and construction sectors. The market size is projected to reach USD 10.54 billion by 2031, expanding at a CAGR of 6.59% over the forecast period 2024-2031. This growth can be attributed to the rising demand for tools used in various industrial processes, Integrates with the increasing need for robust infrastructure development.

Some of the Major Kay Players:

  • Voestalpine AG
  • Samuel, Son & Co.
  • Eramet SA
  • QiLu Special Steel Co.
  • Hitachi Metals
  • Baosteel Group
  • Hudson Tool Steel Corporation
  • Buderus Edelstahl GmbH
  • Schmiedewerke Gröditz
  • Tiangong International

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Growing Demand Across Industries Drive Market Expansion

The SNS Insider report highlights a Increase in demand for tool steel across Various industries. This includes the production of tools Such as saw blades, dies, milling cutters, punches, drills, tool bits, taps, and cutters. The Growing of building and construction sector is anticipated to be a dominant factor Increase the tool steel consumption globally. the tool steel market is expected to benefit from the ever-expanding machinery industry, as this type of steel is particularly well-suited for crafting machine components Such as dies, bits, and cutters. Its key properties, including exceptional resistance to abrasion, superior hardness, and the ability to retain shape at extreme temperatures, make it ideal for various machinery parts.

Government Investments Bolstering Infrastructure and Construction Activities

Government investments in infrastructure projects play a Important role in national self-sufficiency and export competitiveness. Increasing population growth and growing Urbanization in Developing economies are immense strain on existing infrastructure. To address this challenge, governments are actively offering favourable loan schemes to attract foreign direct investment (FDI) and stimulate investments in their respective industrial and construction sectors. This Increase in government spending on infrastructure development, integrates with the growing demand for building and construction activities, is Drive the global tool steel market forward. Tool steel finds extensive application in construction through hand tools, pneumatic tools, and automotive parts utilized in construction vehicles. Governments worldwide are actively contributing to the industry’s growth by implementing favourable policies and launching initiatives that expedite infrastructure development. These large-scale investments in infrastructure projects are driving the global tool steel market’s growth. Technological advancements in the industrial manufacturing sector, including the adoption of advanced heating technologies, are significantly influencing tool steel demand.

Segment Analysis

By Material, the tungsten segment is anticipated to exhibit the fastest growth during the forecast period. Tungsten finds Various applications in automobile production and assembly. The automotive industry utilizes pure tungsten, its compounds, or carbides for various components Such as tire studs, wheel bearings, brakes, crankshafts in high-performance cars, and other mechanical parts that require exceptional durability under extreme loads or high temperatures. Tungsten’s strengthening properties and ability to withstand a wide range of temperatures make it ideal for cutting and shaping metal components. When combined with high-carbon materials, tungsten can enhance wear resistance by up to 3.8% and 1.4%, respectively. It is also employed in the creation of intricate equipment such as drills, reamers, and milling cutters, which is expected to contribute to market expansion.

  • Chromium
  • Tungsten
  • Molybdenum
  • Vanadium
  • Others

By Product: The Plastic Mold segment held the dominant market share in 2023, and this trend is projected to continue throughout the forecast period. Key players in the industry offer customized manufacturing processes and techniques for tool steels, enabling them to cater to the diverse requirements of plastic products and their manufacturing processes. the Growing demand for plastic products significantly contributes to this segment’s growth. The hot work segment is expected to register a significant CAGR over the forecast period. Hot work tool steel finds application in various processes such as extrusion, drop forging, pressure die.

  • High Speed
  • Cold work
  • Hot work
  • Plastic mold
  • Others


  • Rolled
  • Forged
  • Other


  • Automotive
  • Shipbuilding
  • Aerospace
  • Manufacturing
  • Others

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Recent Developments

September 2022: voestalpine, a leading manufacturer of high-performance materials and sophisticated special forgings, secured a contract extension and several new orders for supplying heavy-duty structural parts to Boeing, the world’s largest aircraft manufacturer. Additionally, the prestigious Munich-based company MTU Aero Engines commissioned voestalpine to supply critical forged parts for various aircraft models, including the Airbus A320neo. This signifies the crucial role tool steel plays in the aerospace industry.

October 2022: voestalpine further solidified its position as a technology and innovation leader by allocating a significant budget of around EUR 196 million for research and development (R&D) activities in the current financial year. The company recognizes the positive impact of R&D projects on sustainability. Key research priorities include digitalizing production processes, developing innovative tool steel products, and transitioning to climate-neutral steel production.

Impact of Disruptions and Potential Opportunities

The war between Russia and Ukraine has led to sanctions on Russia, logistical challenges, and a surge in commodity prices. This has resulted in a shortage of tool steel in some regions and a Increase in prices across the board.  The disruption caused by the war could also present some opportunities for alternative suppliers. Tool steel manufacturers in other regions, such as India and Brazil, could potentially increase their production capacity to meet the growing demand.

During economic downturns, businesses typically reduce their capital expenditures, which could Result to a decrease in demand for tools and machinery made with tool steel. This could be particularly pronounced in sectors such as construction and manufacturing, which are major consumers of tool steel. For example, a recent economic slowdown in China led to a decrease in demand for automobiles. This, in turn, resulted in a decline in demand for tool steel used in the production of automotive components.

Key Regional Developments

The Asia Pacific region is expected to remain the world’s largest market for tool steel, driven primarily by the strong economic growth in China and India. Increasing investments in infrastructure projects, integrates with the increasing demand for commercial and residential buildings in these countries, is anticipated to Drive the demand for tool steel used in construction and plastic melding applications. North America is another significant consumer of tool steel due to the presence of a growing automotive industry.

Key Takeaways from the Tool Steel Market Report

The global tool steel market is expected to witness significant growth in the coming years, driven by the burgeoning manufacturing and construction sectors.

A potential economic slowdown could dampen demand for tool steel. However, alternative suppliers could benefit from the disruption caused by the war.

North America is a major consumer of tool steel due to the presence of a thriving automotive industry.

Europe is focusing on cost-effective solutions and high-performance tool steel products.

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