Furnace Market Size - By Application, By Fuel, By Capacity, By Temperature, Growth Forecast, 2026 - 2035

Furnace Market Size

According to a recent study by Global Market Insights Inc., the furnace market was estimated at USD 18.8 billion in 2025. The market is expected to grow from USD 19.9 billion in 2026 to USD 33 billion by 2035, at a CAGR of 5.8%.

• Increasing adoption of energy-efficient furnace technologies coupled with the rising implementation of stringent emission norms and government-backed sustainability programs will bolster the overall industry landscape. Growing investments in advanced heating solutions along with the integration of smart control systems and predictive maintenance platforms will strengthen the global business trend.
   
• A furnace is a heating device or system designed to generate and transfer heat for various applications, typically by burning fuel or using electricity. Furnaces are widely used in industrial, commercial, and residential settings for processes such as metal smelting, material processing, and space heating.
   
• For reference, in May 2025, Carrier announced plans to invest an additional USD 1 billion over the next five years to expand U.S. manufacturing, drive innovation, and strengthen workforce development.
   
• Rising demand for industrial furnaces in manufacturing sectors in conjunction with continuous technological innovations and automation-driven upgrades will augment the evolving product landscape. Expansion of metal processing and automotive industries in tandem with high-performance furnace installations and enhanced thermal efficiency standards will boost the competitive industry scenario.
   
• Escalating focus on reducing carbon footprints in association with sustainable furnace designs and eco-friendly operational frameworks will fortify the long-term business landscape. Surging deployment of electric furnaces coupled with renewable energy integration and electrification initiatives across industrial heating processes will fuel the progressive industry trend.
   
• Increasing replacement of conventional heating systems along with modern furnace technologies and advanced digital monitoring solutions will drive the dynamic business scenario. Growing emphasis on automation in conjunction with IoT-enabled furnace solutions and AI-driven optimization tools will sway the transformative industry landscape.
   
• For instance, in November 2025, homeowners in Ohio can claim up to USD 2,600 in tax rebates on qualifying energy-efficient HVAC systems, including furnaces, heat pumps, and air conditioners. This incentive encourages timely upgrades to advanced heating and cooling technologies for improved efficiency and cost savings.
   
• Rapid urbanization and infrastructure development in tandem with advanced furnace applications and energy-efficient heating mechanisms will penetrate the product adoption. Rising investments in industrial modernization in association with high-efficiency furnace systems and next-generation thermal management technologies will escalate the emerging industry trend.
   
• The furnace market was valued at USD 16.1 billion in 2022 and grew at a CAGR of approximately 5% through 2025. Expanding steel and cement production coupled with demand for continuous heating processes and high-capacity furnace installations will bolster the robust business scenario.
   
• Increasing preference for hybrid furnace systems along with integration of AI-based monitoring and real-time performance analytics will strengthen the innovative industry landscape. Accelerating adoption of electric arc furnaces in tandem with decarbonization initiatives and global climate compliance measures will boost the forward-looking industry scenario.
   
• Surging demand for furnaces in chemical and petrochemical sectors in association with advanced thermal solutions and precision heating requirements will fortify the specialized product landscape. Rising focus on cost optimization coupled with deployment of modular furnace designs and flexible heating configurations will fuel the adaptive industry trend.
   

Furnace Market Trends

• Stringent government regulations and international standards focused on reducing energy consumption are emerging as a major growth driver for the furnace market. Regulatory bodies across regions are enforcing strict norms to curb greenhouse gas emissions and promote energy-efficient technologies.
   
• These mandates are compelling industries to replace outdated, energy-intensive furnaces with advanced models that comply with efficiency benchmarks. In conjunction with sustainability targets, manufacturers are investing heavily in R&D to develop furnaces that consume less fuel while delivering optimal thermal performance.
   
• For reference, in August 2025, Tenova secured a contract to deliver a walking-hearth reheating furnace for Vinton Steel’s Green CityMill Flex project in El Paso, enhancing billet processing capacity with low-NO_x burners and advanced control systems; commissioning is planned for H1 2027.
   
• Industries and residential sectors are increasingly prioritizing heating solutions that minimize energy consumption and operational costs. In conjunction with rising energy prices and sustainability awareness, businesses are shifting toward furnaces equipped with advanced thermal management systems and automation features.
   
• Furthermore, government-backed programs promoting energy conservation and offering financial incentives for adopting efficient systems are fueling market penetration. This growing inclination toward energy-efficient heating solutions, along with advancements in smart technologies, will augment the product landscape, will boost the industry trend.
   
• For illustration, in July 2025, UnitBirwelco from EPCIntel was awarded a major furnace revamp contract by Indian Oil Corporation, highlighting an emphasis on modernizing refinery heater assets through engineering upgrades.
   
• Rapid urbanization and the continuous construction of new residential and commercial buildings are creating substantial opportunities for the furnace market. In conjunction with expanding infrastructure projects and rising living standards, the demand for reliable and efficient heating systems is escalating.
   
• The growing adoption of centralized heating solutions in urban areas, furnaces are becoming an integral component of modern building designs. The construction boom in emerging economies, along with government initiatives for smart cities and sustainable housing, is further amplifying this trend.
   
• Additionally, the integration of advanced furnaces with HVAC systems in commercial complexes and industrial facilities is gaining traction. Rising disposable incomes and consumer preference for energy-efficient home heating solutions are also contributing to market growth.
   

Furnace Market Analysis

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• Based on application, the industry is segmented into residential, commercial, and industrial. The residential furnace market holds a share of 42.4% in 2025. Increasing demand for smart home technologies in conjunction with IoT-enabled furnace systems and automated temperature control will augment the business trend. Surging focus on reducing household energy bills coupled with advanced electric and gas furnace installations will strengthen the industry scenario.
   
• The commercial furnace market is set to exceed USD 10 billion by 2035. Growing deployment of high-capacity furnaces in commercial buildings along with integration of advanced HVAC systems will bolster the business scenario. Expanding adoption of digital monitoring platforms in association with AI-driven furnace operations will fortify the commercial segment, will escalate the business landscape.
   
• For instance, in January 2025, AMERICAN Cast Iron Pipe unveiled a USD 285 million “Next Gen Melt Project” to replace a cupola furnace with four coreless electric induction furnaces, boosting capacity 25% and slashing CO₂ emissions by up to 95%.
   
• The industrial segment will witness a CAGR of over 5% by 2035. Rising investments in industrial modernization coupled with integration of smart sensors and IoT platforms will strengthen the industrial business scenario. Surging adoption of electric arc and induction furnaces in tandem with decarbonization initiatives and global sustainability targets will boost business growth.
   

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• Based on fuel, the industry is divided into electric, gas, oil, and others. The gas segment holds a share of 53.2% in 2025 and is set to exceed USD 17 billion by 2035. Expanding adoption of smart thermostats and IoT-enabled gas furnace systems in tandem with energy optimization initiatives will boost the segment growth. Increasing demand for high-efficiency gas furnaces in conjunction with advanced combustion technologies and emission control systems will augment the product landscape.
   
• The electric segment will witness a CAGR of over 5% by 2035. Growing adoption of electric furnaces in industrial and residential applications along with rising emphasis on clean energy integration will bolster the product landscape. Increasing preference for electrification of heating systems in conjunction with global decarbonization initiatives and renewable energy projects will augment the industry trend.
   
• For reference, in December 2024, Algoma Steel began commissioning a USD 643.11 million electric arc furnace, replacing its blast furnace, increasing production by ~35% and aligning with carbon reduction goals.
• The oil furnace market was estimated at USD 2.2 billion in 2025. Increasing emphasis on upgrading traditional oil-based systems in conjunction with advanced burner technologies and emission reduction measures will augment the industry trend. Expanding residential and commercial heating requirements in tandem with cost-effective oil furnace solutions will boost the segment adoption.
   
• Based on capacity, the industry is divided into small, medium, and large. The small furnace market holds a share of 42.8% in 2025 and is set to exceed USD 14 billion by 2035. Expanding government initiatives promoting energy-efficient appliances in tandem with eco-friendly furnace technologies will boost the small capacity segment penetration.
   
• The medium furnace segment will witness a CAGR of over 5% by 2035. The rising investments in office complexes and retail infrastructure in conjunction with energy optimization initiatives will augment the industry trend. Increasing integration of IoT platforms and AI-based performance analytics in association with medium-sized furnace installations will fortify the market penetration, will escalate the industry landscape.
   
• For instance, in May 2025, Salzgitter Flachstahl announced a multi-hundred-million-euro investment to install a new walking-beam furnace and waste-gas heat recovery system at its hot strip mill in Germany, aiming to reduce energy consumption by approximately 30% and significantly advance its carbon reduction strategy.
   
• The large furnace market was valued at USD 2.6 billion in 2025. Growing demand for large capacity furnaces in industrial applications along with expansion of steel, cement, and chemical manufacturing will bolster the product landscape. Increasing emphasis on process efficiency in conjunction with automation-driven furnace technologies and high-performance thermal systems will augment the industry trend.
   

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• The U.S. dominated the furnace market in North America with around 85.8% share in 2025 and generated USD 4.8 billion in revenue. Growing replacement cycles for legacy residential and commercial furnaces along with the widespread push toward high AFUE-rated gas and electric systems will strengthen the product landscape.
   
• The North America furnace market is projected to surge over USD 25 billion by 2035. Increasing electrification pilots for space heating in conjunction with grid decarbonization pathways and renewable integration will augment adoption of electric furnaces. Surging commercial retrofits for offices, healthcare, and education facilities coupled with smart furnace connectivity and remote diagnostics will drive lifecycle optimization.
   
• For citation, in March 2025, Hyundai Steel announced construction of a USD 5.8 billion EAF-based integrated steel mill in Louisiana, with 2.7 Mtpa capacity scheduled for 2029 startup, marking its first overseas EAF-integrated production base.
   
• The Europe furnace market is set to grow at a rate of over 6.5% by 2035. Growing adoption of condensing gas furnaces in association with stringent seasonal efficiency requirements will augment the business landscape. Rising investments in district heating modernization along with digital metering and thermal balancing will strengthen the market trajectory.
   
• The Asia Pacific furnace market holds a share of 4% in 2025. Surging adoption of electric and induction furnaces coupled with grid expansion and renewable integration will fortify the industry trend. Expanding emphasis on energy efficiency in tandem with smart sensors, IoT platforms, and AI-enabled maintenance will bolster the product landscape.
   
• For illustration, in May 2025, Nippon Steel committed USD 5.57 billion to convert blast furnace operations to electric arc furnace steelmaking across three sites (Setouchi, Kyushu, and Yamaguchi), part of its decarbonization roadmap, supported by government GX funding.
   
• The Middle East & Africa furnace market was valued at USD 116.2 million in 2025. Rising adoption of digital monitoring platforms in association with remote diagnostics and condition-based maintenance will augment the product landscape. Growing emphasis on water- and dust-resistant designs in conjunction with harsh-environment duty cycles will strengthen the business scenario.
   
• The Latin America furnace market will exceed USD 400 million by 2035. Increasing focus on emissions compliance and heat recovery systems along with improved refractory materials will boost the industry trend. Expanding commercial construction for retail, logistics, and healthcare in tandem with modern HVAC planning will bolster the regional landscape.
   

Furnace Market Share

• The top 5 players in furnace industry are Inductotherm Group, ANDRITZ, Ipsen, Lennox International & Daikin Industries contribute around 42% of the market share in 2025. The market is highly competitive, driven by industrial growth, energy efficiency demands, and technological advancements in heating systems.
   
• Inductotherm Group is a global leader in induction heating and melting systems, serving steel, foundry, and specialty metal industries. Its competitive strength lies in advanced induction furnace technology, energy efficiency, and customization for high-performance industrial applications.
   
• ANDRITZ focuses on industrial furnace solutions for metal processing, offering integrated systems for heat treatment and continuous production lines. The company’s edge comes from engineering expertise, automation capabilities, and strong presence in large-scale industrial projects worldwide.
   
• Ipsen specializes in heat treatment furnaces for aerospace, automotive, and tool manufacturing sectors. Known for vacuum and atmosphere furnaces, Ipsen’s competitive advantage is its innovation in precision heat treatment and global service network supporting high-quality manufacturing.
   
• Lennox International operates primarily in HVAC and heating solutions, including residential and commercial furnaces. Its strength lies in energy-efficient designs, smart controls, and sustainability-focused products, making it a key player in comfort heating markets globally.
   
• Daikin Industries is a major player in climate control and heating systems, offering advanced furnace technologies integrated with smart and eco-friendly solutions. Its competitive position is reinforced by strong R&D, global distribution, and focus on high-efficiency heating systems.
   

Furnace Market Companies

• In the first nine months of 2025, Carrier reported net sales of approximately USD 16.9 billion, reflecting steady performance across its core segments. Operating activities generated net cash flows of USD 341 million, while capital expenditure totaled USD 117 million. This resulted in a free cash flow of USD 224 million, underscoring the company’s disciplined financial management and focus on liquidity and operational efficiency.
   
• In the first half of 2025, Daikin Industries reported revenues of approximately USD 16 billion, supported by its diversified product portfolio and global market presence. Operating profit reached USD 1.6 billion, reflecting solid performance in core HVAC segments despite macroeconomic challenges.
   
• In 2024, ANDRITZ reported consolidated revenues of approximately USD 9.8 billion, reflecting its strong global market presence. The company achieved an EBITDA of around USD 1 billion, underscoring robust operational performance and cost efficiency. Earnings Before Taxes (EBT) stood at USD 760 million, highlighting sustained profitability and strategic execution across its diversified business segments.
   

Major players operating in the furnace market are:

• ANDRITZ
• Axis Thermal Engineering
• Carbolite Gero
• Carrier
• CM Furnaces
• Daikin Industries
• Entec Industrial Furnaces
• Gadda Industrie
• IHI Machinery and Furnace
• Indo Power
• Inductotherm Group
• Ipsen
• JR Furnace & Ovens
• Lennox International
• Lucifer Furnaces
• Rheem Manufacturing Company
• Shanghai Muffle Furnace Technology Instrument
• Technotherma (India)
• Tenova
• The Grieve Corporation
• Trane
   

Furnace Industry News

• In November 2025, Daikin announced the commencement of construction for a new manufacturing facility in Jeddah, Saudi Arabia, reinforcing its position as a leading provider of HVAC-R solutions. The new facility is designed to cater to the growing demand for advanced HVAC solutions across the Kingdom and the wider Middle East region. This strategic investment highlights Daikin’s commitment to supporting Saudi Arabia’s manufacturing sector, aligning with regional economic diversification goals, and strengthening its footprint in high-growth markets.
   
• In October 2025, Rheem announced the introduction of its newest product line, the RDFXYC reinforcing its leadership in innovative HVAC solutions. These advanced units are designed to meet the needs of both homeowners and contractors by integrating a high-efficiency heat pump and a gas furnace into a single, versatile system. The launch reflects Rheem’s ongoing commitment to delivering sustainable, energy-efficient heating and cooling technologies that align with evolving customer expectations and regulatory requirements.
   
• In September 2025, JR Furnace & Ovens announced the successful delivery of a Grooved-Type Hardening & Tempering Furnace System with a 10-ton capacity, specifically designed for processing alloy steel components. This advanced solution offers a complete heat treatment package, featuring hardening and tempering units integrated with an automated rail-bound loading and unloading system, a quenching tank, and a fully automated PLC and SCADA control platform.
   
• In July 2025, ANDRITZ announced that it had signed a contract with CERI Technology Company to deliver an advanced annealing furnace at Hebei MFG Metallurgical Materials Technology. The galvanizing line will serve as a critical component of MFG’s precision alloy color coating for the industrial park project in Changzhou, China. This collaboration highlights the growing demand for high-tech furnace solutions in China’s metallurgical industry and reinforces ANDRITZ’s expertise in delivering advanced equipment for precision alloy applications.
   

The furnace market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) and volume (‘000 Units) from 2022 to 2035, for the following segments:

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Market, By Application

• Residential
• Commercial
• Industrial

Market, By Fuel

• Electric
• Gas
• Oil
• Others

Market, By Capacity

• Small
• Medium
• Large

Market, By Temperature

• Low
• Medium
• High

The above information has been provided for the following regions & countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • UK
  • Italy
  • Spain
  • Portugal
  • Romania
  • Netherlands
  • Switzerland
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • South Africa
• Latin America
  • Brazil
  • Argentina