For these reasons the electric furnace has an expanding use in steel-making, especially in the manufacture of special steels—particularly high alloy steels, stainless steels and tool steels. Even in the field of carbon steels, the indications are that the electric furnace is, in many countries where the disadvantage of higher operational costs can be overcome, actively competing with the open-hearth furnace.
The principle involved in the production if heat in an electric furnace is that when an electric current flows through a conductor, the energy expended in overcoming the resistance appears as heat. The greater the resistance, the greater the heat. According to the manner of resistance, two types of furnace can be distinguished.