Sprott is a Toronto-headquartered asset manager specializing in precious metals and critical materials (NYSE/TSX: SII), tracing its roots to Sprott Securities founded by Eric Sprott in 1981 and now led by CEO Whitney George. It runs physical gold, silver and uranium trusts, ETFs, active strategies and resource lending, with about $65bn in AUM. The Insights column carries monthly commentaries and white papers on uranium, gold, silver, copper and critical materials by Paul Wong, Jacob White and John Hathaway (ex-Tocqueville gold manager) — note the house's structurally bullish commodity stance, as it sells the corresponding trusts and ETFs.
This report explains why steel is essential for the global shift to electricity, from wind turbines to EV charging grids. Most people overlook it. "Green steel"—made with cleaner energy—currently accounts for less than 1% of all steel but could grow over 50% annually. For everyday investors, that means potential growth in companies leading that shift. But there's risk: China produces more than half the world's steel, so any supply disruption could drive prices sharply higher. It's worth reading because it highlights a hidden but concrete opportunity tied to the energy transition.
Sprott’s report points out that steel is an indispensable critical material for global electrification. It projects that global electricity demand will grow by 169% from 2023 to 2050, with steel playing a central role in infrastructure, transportation, and power grids. China currently produces over
This chapter focuses on the central role of steel in the global electrification process, highlighting that steel is an indispensable foundational material for meeting future electricity demand. The report emphasizes that although steel is often overlooked, it plays a critical role in infrastructure, transportation, and grid construction, especially against the backdrop of a projected substantial increase in global electricity demand.
The author's core investment argument is: Steel is the "invisible champion" of the electrification era, and its strategic importance is underestimated by the market. Counterintuitive judgments include:
1. Electricity demand driver: The IEA projects global electricity demand will grow by 169% from 2023 to 2050, with steel serving as the foundation for supporting grids, power generation, and storage.
2. China's dominance:
3. Green steel market:
4. Steel usage in renewable energy:
5. Green steel technologies:
6. Recycling rates:
Comparative Data Table:
| Indicator | Green Steel | Overall Steel |
|---|---|---|
| 2024 Market Size | $6.2 billion | $1.47 trillion |
| 2030 Market Size (Conservative) | $20 billion | $1.92 trillion |
| 2025-2030 CAGR (Conservative) | 21.4% | 2.6% |
| Share of Global Steel in 2030 (Conservative) | 1.30% | 100% |
| 2025-2030 CAGR (Aggressive) | 56% | - |
This chapter focuses on the critical role of high-performance steel in grid upgrades and energy storage systems, while delving into the geopolitical risks of the global steel supply chain. The author argues that, driven by surging electricity demand and accelerating decarbonization, steel has transformed from a basic industrial commodity into a strategic asset tied to economic resilience and energy security.
The author’s core investment thesis is: Early adopters of green steel will benefit from a fast-growing, policy-driven niche market. The report emphasizes that steel is no longer a mere industrial commodity but a "skeleton key" for the energy transition, and that its supply chain concentration (China accounts for over 50% of global crude steel output) and decarbonization pathways will reshape the global competitive landscape.
1. Clear Demand for Grid Upgrades: High-performance steel provides a corrosion-resistant framework for transmission towers and utility poles, and drives the development of advanced steel-core conductors to reduce energy losses. A report from the U.S. Federal Energy Regulatory Commission (FERC) shows that 888 miles of 345 kV and above transmission lines were built in 2024.
2. Energy Storage Systems Depend on Steel: Steel is used in lithium-ion battery casings, gravity energy storage (utilizing scrap metal), thermal energy storage (TES) tanks, and CO₂ storage units integrated with turbines.
3. Supply Chain Vulnerabilities: After the COVID-19 pandemic in 2021, surging demand combined with supply bottlenecks drove steel prices to historic highs. Currently, U.S. Section 232 tariffs and the EU Carbon Border Adjustment Mechanism (CBAM) have reshaped supply chains, with carbon regulations putting traditional high-emission producers at a disadvantage.
4. Geopolitics of Green Steel: Countries with abundant renewable energy resources (e.g., Nordic nations, Australia, the Middle East) are positioning themselves as future hubs for low-carbon steel production. Governments are reducing exposure to overseas supply shocks and carbon penalties through localization and recycling strategies.
Key Comparative Data:
| Metric | Data |
|---|---|
| China’s share of global crude steel output | >50% |
| New U.S. 345kV+ transmission lines in 2024 | 888 miles |
| Steel price trend in 2021 | Soared to historic highs due to supply-demand imbalance |