Tool Steel Market Report 2026

The tool steel market size has grown strongly in recent years. It will grow from $6.81 billion in 2025 to $7.23 billion in 2026 at a compound annual growth rate (CAGR) of 6.1%. The growth in the historic period can be attributed to expansion of metal machining activities, growth of automotive manufacturing, increasing use of industrial dies and molds, demand for durable cutting tools, development of heavy engineering industries.

The tool steel market size is expected to see strong growth in the next few years. It will grow to $9.18 billion in 2030 at a compound annual growth rate (CAGR) of 6.2%. The growth in the forecast period can be attributed to growth of electric vehicle manufacturing, rising adoption of precision machining, expansion of aerospace and defense production, demand for longer tool life, increasing automation in manufacturing. Major trends in the forecast period include rising demand for high performance cutting tools, growth of customized tool steel grades, increased use of hot working tool steels, focus on enhanced wear and heat resistance, adoption of advanced heat treatment techniques.

The expanding automotive industry is anticipated to drive the growth of the tool steel market in the coming years. The automotive industry comprises companies and organizations engaged in the development, design, manufacturing, and marketing of motor vehicles. Tool steel, including stainless steel, high-strength steel, low-carbon steel, high-carbon steel, and galvanized steel, supports the automotive sector in manufacturing vehicle and engine components. For example, in January 2025, according to the China Association of Automobile Manufacturers (CAAM), a China-based non-profit industry association, China produced approximately 31.282 million vehicles in 2024, representing a 3.7% increase compared to 2023. Hence, the expanding automotive industry is expected to enhance demand for tool steel over the forecast period.

Major companies in the tool steel market are concentrating on creating new technological solutions to bolster their market position. For instance, in October 2024, Sandvik, a Sweden-based engineering firm, introduced the Osprey HWTS 50, a hot work tool steel powder specifically designed for additive manufacturing. This innovative product is engineered for high-temperature applications such as die casting and forging, providing improved wear resistance and thermal stability. The powder is especially effective for producing complex geometries and intricate designs, addressing the rising demand for durable, high-performance tooling in various manufacturing sectors.

In December 2023, Ryerson, a U.S.-based metals distributor and processor, completed the acquisition of Hudson Tool Steel Corporation for an undisclosed sum. Through this acquisition, Ryerson seeks to broaden its specialty steel offerings, reinforce its service capabilities, and strengthen its operational presence across North America. Hudson Tool Steel Corporation is a U.S.-based firm that focuses on the distribution and processing of high-performance tool steels for industrial applications.

Major companies operating in the tool steel market are Hitachi Metals Ltd., Swiss Steel Group, Voestalpine AG, Tiangong International, Sandvik, QiLu Special Steel Co. Ltd., NACHI-Fujikoshi Corporation, Nippon Steel, JFE Steel Corporation, Tata Steel Limited, Kobe Steel Limited, ArcelorMittal, Hudson Tool Steel Corporation, Nucor Corporation, POSCO (Posco America), Gerdau, Aperam South America, Beloretsk Metallurgical Plant AO, Ezz Steel, Hod Assaf Industries Ltd., China Baowu Steel Group Corp., Samuel Son & Co., Algoma Steel Inc., Ternium S.A., Ternium Argentina SA, Suzuki Garphyttan AB, BSi Steel Pty Ltd., Kandil Steel Company, The Yehuda Group.

Asia-Pacific was the largest region in the tool steel market in 2025, and it is expected to be the fastest-growing region in the forecast period. The regions covered in the tool steel market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the tool steel market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The tool steel market consists of sales of blacksmith chisels, cold chisels, hot working chisels, and clutch parts. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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