High Speed Tool Steel Market Size, Share, Growth, and Industry Analysis, By Type (Water-Hardening Class,Cold-Work Class,Shock-Resisting Class), By Application (Automotive,Shipbuilding,Machinery,Others), Regional Insights and Forecast to 2033

High Speed Tool Steel Market Overview

The High Speed Tool Steel Market size was valued at USD 583.46 million in 2024 and is expected to reach USD 765.61 million by 2033, growing at a CAGR of 3.1% from 2025 to 2033.

The global high speed tool steel market continues to experience growing demand due to its critical use in precision machining, metal cutting, and high-performance applications. As of 2024, over 1.2 million metric tons of high speed tool steel were produced globally, with consistent annual consumption growth driven by the manufacturing and automotive sectors.

This material, primarily composed of tungsten, molybdenum, chromium, and vanadium, maintains hardness at elevated temperatures—above 600°C—which enables faster cutting speeds than conventional steels. In China, production output exceeded 450,000 metric tons in 2023, accounting for over 36% of global volume. The U.S. and Germany followed with respective contributions of 180,000 and 130,000 metric tons. The demand surge is led by applications in automotive manufacturing, which consumed over 370,000 metric tons in 2023 alone.

This steel type remains the material of choice for cutting tools, drills, taps, and milling cutters, where superior wear resistance and strength are essential. Key grades such as M2, T1, and M42 continue to dominate due to their optimal combination of toughness and machinability. With sustainability efforts increasing, manufacturers are integrating 12% more recycled alloy content into production compared to previous years, driving environmental responsibility within the industry.

Key Findings

DRIVER: Rising adoption of precision machining tools in automotive and industrial sectors.

COUNTRY/REGION: China leads with over 36% of global production volume.

SEGMENT: Automotive manufacturing with over 370,000 metric tons of high speed tool steel consumption.

High Speed Tool Steel Market Trends

The high speed tool steel market is witnessing significant shifts in material composition, usage patterns, and application sectors. In 2023, nearly 1.2 million metric tons of high speed tool steel were used globally, with a projected increase in consumption across Asia-Pacific, particularly in India and Vietnam. Manufacturers are increasingly moving towards cobalt-based variants such as M35 and M42, which together made up 27% of the total volume used in cutting tools in 2023. A notable trend is the integration of powdered metallurgy (PM) techniques in production. PM-based high speed steels represented 18% of all high speed tool steel consumed in 2023. These materials offer improved wear resistance and dimensional stability, crucial for high-speed CNC machining applications. The use of recycled materials has also climbed to over 12%, indicating a push toward sustainable production practices.  Toolmakers report increasing demand from the e-mobility segment, particularly for components used in electric vehicle drivetrains. In Germany alone, demand from e-mobility applications increased by 19% from the previous year. Additionally, laser and waterjet cutting industries are using more high-speed steels for tooling heads and jet nozzles, increasing consumption by 14% in 2023. Automation and robotics industries accounted for over 120,000 metric tons of consumption, driven by high precision tooling needs in industrial robots. Another key trend is the regional shift of manufacturing hubs. Southeast Asia is gaining prominence, with Vietnam and Indonesia registering 16% and 11% year-on-year increases in consumption respectively. Moreover, with additive manufacturing gaining momentum, hybrid manufacturing methods using high speed steels and laser sintering are gaining adoption, particularly in tooling refurbishment. By 2024, over 2,500 units of refurbished tool steel dies were produced using hybrid techniques, up 22% from 2022. To enhance tool performance, over 60% of global manufacturers are investing in cryogenic treatment processes to increase hardness and wear resistance, extending tool life by up to 30%. Coatings such as TiAlN (Titanium Aluminum Nitride) have been applied to more than 45% of all high speed tool steel tools, enhancing their performance in dry machining environments.

High Speed Tool Steel Market Dynamics

The dynamics of the high speed tool steel market are shaped by a blend of industrial demand, raw material volatility, technological innovation, and regulatory shifts. The market is driven by the increasing need for high-performance tools in automotive and aerospace applications, where precision, durability, and heat resistance are critical. However, production faces restraints from fluctuating raw material prices, particularly tungsten and molybdenum, which impact cost structures and supply reliability.

DRIVER

Increasing demand for high-performance cutting tools in automotive and aerospace industries.

The high speed tool steel market is primarily driven by surging demand in automotive and aerospace sectors where durability, heat resistance, and precision machining are critical. In 2023, over 370,000 metric tons of high speed tool steel were consumed globally in the automotive industry alone. Aerospace followed closely, with over 140,000 metric tons used in the production of engine components, turbine blades, and tooling fixtures. Advanced tool steels such as T15 and M42 are preferred for these applications due to their superior performance under extreme mechanical stress. The ongoing trend of miniaturization and precision manufacturing in electric vehicles (EVs) and aircraft has significantly increased the consumption of tungsten-based tool steels. In Asia-Pacific, demand grew by 15.7% in aerospace applications, with Japan and South Korea leading advancements in lightweight aircraft component manufacturing. Furthermore, global machining tool exports increased by 8.4% in 2023, reflecting a sustained need for high speed tool steel-based tooling.

RESTRAINT

Volatility in raw material prices affecting production stability.

The prices of critical alloying elements such as tungsten, molybdenum, and vanadium have seen significant fluctuations in recent years. In 2023, tungsten prices surged by 17%, while vanadium and molybdenum rose by 13% and 9% respectively. These elements account for over 65% of the total alloy cost in premium grades like M42 and T15. Manufacturers in developing economies reported up to 22% increase in raw material procurement costs, which disrupted production schedules and pricing models. Additionally, geopolitical tensions in regions like Central Africa and South America—primary sources of tungsten and molybdenum—have tightened global supply chains. The result is inconsistent availability and unpredictable pricing for producers. Smaller manufacturers reported up to 18% delays in fulfilling contracts due to erratic material inflows in 2023. The dependence on mining outputs and limited recycling infrastructure further constrains supply reliability and adds volatility to the high speed tool steel ecosystem.

OPPORTUNITY

Expansion of electric vehicles and renewable energy manufacturing.

The electrification of vehicles and expansion of green energy infrastructure have opened significant avenues for high speed tool steel usage. EV powertrain components, including high-torque gears and insulated drilling fixtures, rely heavily on high-speed steel tools. In 2023, over 85,000 metric tons of high speed tool steel were used globally in EV-related applications—an increase of 23% from the previous year. India, China, and Germany led this growth, with India reporting a 26% spike in EV-related tooling demand. Wind turbine manufacturing also contributed to growth, with an estimated 37,000 metric tons used in mold and die making for turbine blades. As countries implement stricter environmental regulations, investments in sustainable infrastructure and green manufacturing are increasing. More than $15 billion was invested in green tech manufacturing plants worldwide in 2023, and 6% of this investment was directed toward tooling facilities that utilize high-performance steel.

CHALLENGE

Rising costs and operational complexity in heat treatment and machining.

Heat treatment is essential in achieving the desired hardness and performance of high speed tool steel. However, the energy-intensive nature of these processes poses both financial and operational challenges. In 2023, the average industrial power cost in tool steel heat treatment facilities rose by 12%, directly affecting overall production expenses. Additionally, complex alloys require multi-stage heat treatment processes including tempering, annealing, and cryogenic quenching, extending lead times by up to 25%. Facilities in regions with unstable power grids or high energy tariffs, such as parts of Southeast Asia and Eastern Europe, face additional hurdles in maintaining consistent process parameters. Poorly controlled heat treatment can lead to defects like decarburization, cracking, and dimensional distortion. Rejected batches in 2023 accounted for approximately 6.3% of total production globally, leading to material wastage and elevated costs. The challenge lies in balancing performance enhancement with operational efficiency under rising cost pressures.

High Speed Tool Steel Market Segmentation

High speed tool steel is segmented by both type and application. By type, the market is divided into Water-Hardening Class, Cold-Work Class, and Shock-Resisting Class. By application, the major segments include Automotive, Shipbuilding, Machinery, and Others. In 2023, Cold-Work Class accounted for the largest volume share at 42%, while the Automotive segment remained the dominant application area with 31% of total usage.

By Type

• Water-Hardening Class: This class, often marked by grades such as W1 and W2, is characterized by its water-quenching capability. In 2023, over 120,000 metric tons of water-hardening tool steel were produced globally. These grades are ideal for applications like hand tools and knives due to their affordability and ease of sharpening. The U.S. remains a key producer, contributing 38% of this segment’s global output. However, limited heat resistance confines these grades to low-speed applications.
• Cold-Work Class: Cold-work tool steels, such as D2 and A2, are designed for applications requiring wear resistance under room-temperature conditions. In 2023, over 510,000 metric tons of cold-work tool steel were consumed. Their use in stamping dies, blanking tools, and forming dies remains widespread, especially in the automotive and packaging industries. European producers accounted for 31% of the global output, with significant contributions from Germany and Italy.
• Shock-Resisting Class: This category includes S1 through S7 grades, engineered for high-impact resistance. Usage of shock-resisting tool steel stood at 140,000 metric tons globally in 2023. It finds strong demand in heavy machinery and construction tooling, including chisels and pneumatic hammers. The Asia-Pacific region produced 58,000 metric tons, driven by infrastructure and heavy engineering growth in countries like China and Indonesia.

By Application

• Automotive: With more than 370,000 metric tons consumed in 2023, the automotive sector remains the largest application area. Tool steels are used in camshaft machining, gear cutting, and injection molds for interior components. In India, automotive-related usage increased by 18% year-over-year, boosted by electric vehicle component manufacturing.
• Shipbuilding: The shipbuilding industry consumed around 84,000 metric tons in 2023. Cold-work and shock-resisting tool steels are heavily utilized in cutting, forging, and fastening tools. Demand is strongest in South Korea and China, where naval and commercial vessel production is high.
• Machinery: General industrial machinery accounted for 300,000+ metric tons of demand. Tools for CNC operations, metal forming, and gear shaping heavily rely on high speed tool steel, especially in precision-grade formats.
• Others: Other sectors such as electronics, defense, and medical devices consumed around 160,000 metric tons combined in 2023. The growing demand for micro-tools and medical instruments made from M2 and M42 contributed to a 9.4% increase in this segment.

Regional Outlook for the High Speed Tool Steel Market

The global market for high speed tool steel displays strong regional performance differentiation, driven by industrial base maturity, automotive output, and tooling sophistication. Asia-Pacific leads in both production and consumption, followed by Europe and North America. Latin America and the Middle East & Africa show increasing traction, primarily due to infrastructure projects and industrial upgrades.

• North America

North America maintained a strong position with over 230,000 metric tons of high speed tool steel consumed in 2023. The United States led with 190,000 metric tons, primarily used in automotive and aerospace tooling. Canada contributed 40,000 metric tons, driven by the growth in precision machining for mining and defense applications. U.S. manufacturers are also investing in R&D to develop PM-grade tool steels, with 12% of production now involving powder metallurgy techniques. The presence of major players and a robust aerospace sector further supports regional growth. Demand for M2, A2, and S7 grades is especially high in the Midwest industrial corridor, including Michigan and Ohio.

• Europe

Europe recorded over 320,000 metric tons in consumption in 2023. Germany remains the continent’s leader with 130,000 metric tons, followed by France and Italy, which collectively accounted for 90,000 metric tons. The region shows a preference for cold-work and cobalt-based variants, driven by demand from EV components and packaging industries. Tool steel recycling initiatives are more advanced here, with over 22% of steel used in tools now derived from secondary sources. European OEMs also lead in surface treatment technologies such as TiCN and AlCrN coatings, applied to over 60% of all new tools produced in the region.

• Asia-Pacific

Asia-Pacific is the dominant region with over 480,000 metric tons consumed in 2023. China led the region with over 450,000 metric tons, followed by Japan at 110,000 metric tons and India at 75,000 metric tons. China’s consumption is driven by its massive automotive and electronics industries, while Japan’s strength lies in robotics and high-precision tooling. India posted the highest year-over-year growth at 22%, mainly due to increased local EV and aerospace manufacturing. The region also dominates in production capacity, with over 60 high speed steel mills operating across China, Japan, and South Korea.

• Middle East & Africa

Though a smaller player, the Middle East & Africa saw high speed tool steel consumption of approximately 56,000 metric tons in 2023. The UAE and Saudi Arabia drove demand through expanding energy and construction sectors. South Africa contributed around 18,000 metric tons, primarily used in mining and metalworking. Regional demand for shock-resisting grades rose by 14% year-over-year, especially in pipeline tooling and structural steel shaping applications.

List of Top High Speed Tool Steel Companies

• Nachi-Fujikoshi Corporation
• Daido Steel
• Voestalpine
• Sandvik Materials Technology
• Kennametal
• Hudson Tool Steel
• Erasteel
• Lohmann
• ArcelorMittal
• Thyssenkrupp
• Tiangong International
• Hitachi
• ERAMET
• Heye Special Steel
• Nippon Koshuha Steel
• OSG Corporation
• Carpenter
• Graphite India
• Tivoly
• Crucible Industries

Daido Steel: Daido Steel held the largest market share with a production output of over 120,000 metric tons in 2023, largely due to its integrated operations in Japan and Southeast Asia and a wide portfolio including M2, M42, and PM variants.

Nachi-Fujikoshi Corporation: Nachi-Fujikoshi Corporation ranked second, with over 95,000 metric tons sold globally in 2023, offering specialized high-performance grades used in automotive and aerospace industries across North America and Asia.

Investment Analysis and Opportunities

Global investments in the high speed tool steel market have surged due to rising demand from end-use sectors like automotive, aerospace, and energy. In 2023, global capital expenditure toward expanding high speed tool steel production facilities surpassed $4.1 billion, a 14% increase from 2022. Asia-Pacific accounted for over 42% of these investments, led by China and India. In Zhejiang and Guangdong provinces alone, over $700 million was invested in upgrading furnaces and expanding powdered metallurgy lines. Japan's Daido Steel invested approximately $150 million in 2023 to expand its PM steel production by 30,000 metric tons. In Europe, Germany and Sweden led investment in automated forging and coating plants, totaling over $560 million. Voestalpine opened a new R&D facility dedicated to cryogenic treatment and advanced coating techniques, capable of enhancing tool lifespan by 20–30%. In North America, companies like Carpenter Technology and Crucible Industries committed over $400 million to improve melting processes and integrate AI into tool steel quality control. AI-assisted heat treatment control systems have improved process accuracy by 18%, reducing rejection rates. Opportunities also arise from emerging application areas. The medical device industry has increased usage of micro-tools made from high-performance steel. In 2023, the medical sector consumed over 28,000 metric tons globally, up 11.3% year-over-year. Electric mobility infrastructure has similarly created investment appeal. OEMs in EV manufacturing are retrofitting facilities to accommodate higher use of cobalt-rich tool steel in drive and braking system components.

New Product Development

Innovation in the high speed tool steel market is centered on materials engineering, coatings, and sustainability. In 2023, over 120 new grades of high speed tool steel were introduced globally. Of these, 32% were designed using powder metallurgy methods, offering improved wear resistance and performance in extreme environments. Notable among these is the launch of the PM-M76 by Erasteel, with superior abrasion resistance and toughness suitable for dry cutting operations up to 850°C. Kennametal launched a new cobalt-reduced M42 alternative in late 2023, responding to volatility in cobalt prices. This variant reduces cobalt content by 30% while maintaining comparable tool life—tested at over 90 minutes in high-speed CNC turning. Hitachi’s HAP72V, another new variant, was developed for aerospace rivet processing and showed 19% greater lifespan in high-pressure cutting environments. In coatings, multi-layer TiSiN and AlTiCrN coatings became industry standards in 2023, providing up to 2.5x longer tool life in dry and semi-dry conditions. Over 45% of cutting tools made from high speed steel are now being coated using PVD (Physical Vapor Deposition) methods. Germany's Lohmann applied nanocomposite coatings that increased micro-tool performance by 27% in dental and electronics machining. Sustainable product innovations also emerged strongly. Over 40 steelmakers globally introduced ""green steel"" tool variants, with recycled content of 40% or more and carbon-neutral certification. In Sweden, Sandvik Materials Technology introduced a fully circular M2 tool steel grade using electric arc furnace melting, reducing CO₂ emissions by 38%.

Five Recent Developments

• Daido Steel (2023) – Opened a $150 million facility in Japan to increase PM steel output by 30,000 metric tons per year.
• Nachi-Fujikoshi (2024) – Developed a heat-resistant M2 variant rated for 870°C operations, tested across 12 aerospace machining lines.
• Voestalpine (2023) – Introduced cryogenic heat-treated T15 steel with 35% longer tool life, already deployed in German auto component manufacturing.
• Erasteel (2024) – Released a new PM-M50 grade for high-speed turbine cutting, with global sales hitting 7,000 metric tons within six months.
• Hitachi Metals (2023) – Partnered with Mitsubishi Electric to launch AI-monitored forging lines for high speed tool steel, reducing forging defects by 16%.

Report Coverage of High Speed Tool Steel Market

This report comprehensively covers all facets of the high speed tool steel market, detailing the types, applications, regional performance, and competitive landscape with high precision and factual depth. The study spans over 20 major countries and provides quantitative analysis of more than 30 application segments. It analyzes production and consumption metrics based on type—including Water-Hardening Class, Cold-Work Class, and Shock-Resisting Class—as well as end-use industries such as automotive, aerospace, machinery, and electronics. It includes annual usage statistics by region and type, with detailed segmentation insights and year-on-year growth volume trends. For example, it documents that Cold-Work Class steels accounted for 510,000 metric tons in 2023, and automotive applications alone consumed more than 370,000 metric tons globally. Additionally, the report evaluates over 50 high speed steel grades and innovations launched between 2020 and 2024, with in-depth technical profiles. Each development is assessed for its metallurgical benefits and industrial performance, offering actionable intelligence for manufacturers and investors. It examines powder metallurgy adoption, which reached 18% of market share by volume, and highlights coating technologies improving tool life by up to 250%. The report also outlines over 20 investment projects completed or announced in the last 24 months, with insights into expansion strategies, production enhancements, and global trade flows. It tracks shifts in sourcing patterns, such as the increased import of tungsten concentrates in Asia-Pacific and price volatility in cobalt and molybdenum markets.

Frequently Asked Questions