Electrical Steel Market Overview

The global Electrical Steel market size is projected to reach US$ 52.4 Billion by 2033 from US$ 30.9 Billion in 2025. The market is expected to register a CAGR of 7.0% during 2025–2033. This growth is primarily driven by rising demand across the energy, automotive, and industrial sectors.

Electric steel, referred to as silicon steel or lamination steel, is a purpose-specific alloy used to increase magnetic performance and reduce energy waste, and is a key material in the production of transformers, motors, and electric generators. The industry is in the process of radical change driven by the increased focus on energy efficiency, electrification processes, and the integration of renewable energy sources. Market trends include the increasing use of electric vehicles (EVs), whose high-performance needs rely heavily on the use of electrical steel to operate in the best manner. Its use in transformer and energy storage device applications is also increasing with the mainstreaming of the world toward the use of smart grids and renewable sources such as wind and solar energy. The grain-oriented type of electric steel is seeing high demand in transmission processes, while the use of the non-grain-oriented type is seeing greater importance in the automotive and appliance industries. This segmentation enables the production to suit the performance needs, further fuelling the growth of the market

Electrical Steel Market Drivers and Opportunities

The growing demand for electric vehicles (EVs) is anticipated to lift the electrical steel market during the forecast period

​​The fast-growing use of electric vehicles (EVs) across the world is a key factor driving the expansion of the electrical steel market. EVs are powered through electric motors, which need high-efficiency magnetic cores based on grain-oriented electrical steel to operate effectively. The steel is rich in excellent magnetic performance and low energy loss, and thus enhances the efficiency and performance of the EV powertrains as a whole. Due to the efforts of governments and automakers across the world to cut carbon emissions, production of EVs is increasing sharply. Zero-emission vehicle regulations, tax credits, and government subsidies have spurred mass usage of EVs in leading countries such as the U.S., China, and European nations. Consequently, manufacturers are considerably expanding the production of high-performance electric motors, further boosting the usage of advanced electrical steel materials.

Additionally, the move towards electric and battery electric vehicles creates the need for more efficient and compact motors, further solidifying the use of premium-grade electrical steel. Both high-frequency and lightweight electrical steel variants are specifically demanded in this case. In addition to this need, numerous automotive manufacturers are forming partnerships or developing in-house motor manufacturing facilities, further increasing the need for a secure and scalable electrical steel supply chain. This upsurge in EV manufacturing is no fad but a sustainable market shift based on sustainability objectives and the expectations of consumers demanding eco-friendly mobility. Thus, the expanding incorporation of electric drivetrains is predicted to continue being a vital factor in propelling the world's electrical steel market’s growth.

Industrial automation and electrification a vital drivers for influencing the growth of the global electrical steel market

​An acceleration of industrial automation and electrification in many industries is yet another force behind the electrical steel market worldwide. Industries are increasingly adopting intelligent manufacturing processes, robotics, and digital controls, and high-performance electric motors and power distribution networks are in greater demand as a result. Electrical steel is a key part of the motor and generator core where electromagnetic performance is delivered with minimal energy losses. The fourth industrial revolution, or Industry 4.0, is centered upon connected systems, real-time information, and energy-saving machinery patterns of use that are all based largely upon sophisticated electrical components featuring electrical steel. Further, the shift towards electrification is also being driven in other applications, including construction, mining, and rail transport. Such applications are replacing conventional mechanical systems with electric-powered machinery to curb emissions and optimize energy efficiency. Examples are electric locomotives and industrial cranes that need high-power, large-size motors requiring specialized grain-oriented and non-grain-oriented electric steel to work at their best. The increased usage of electric over hydraulic machinery is prompted by advantageous aspects such as lower operating costs and maintenance, and the aspect of sustainability in the environment. Electrification through different sectors is still taking place and the need for low-loss and high-efficiency electrical steel will continue to be the focus in helping the shift occur and cement its position in the energy and industrial landscape.

Innovation in high-frequency and lightweight electrical steel is poised to create significant opportunities in the global electrical steel market

​There is a growing requirement for high-performance and compact electric components across various industries, and this is propelling the need for advanced electrical steel products based on high-frequency and lightweight variants. Such specialized steels are optimized to work at high-speed or high-frequency conditions and are therefore suitable and applicable in electric vehicle motor applications, high-speed rail transit, robotics, and small-size transformers. Due to the world's direction toward miniaturization and energy savings, there is increasing attention towards electrical steel grades able to achieve high performance using lower core losses and weight. High-strength electrical steels have low eddy current and hysteresis losses and thus promote energy efficiency in motors used in high-frequency switching conditions. This aspect is significant to next-generation electric vehicles and industrial automation machinery relying upon fast and accurate electric drive mechanisms. In the same manner, high-strength electrical steels are increasingly being used in the aerospace and automotive industry, where the weight savings in the system can directly translate to improved fuel efficiency and operational efficiency.

The production of such advanced steel grades necessitates advanced metallurgy and specialized manufacturing processes. Firms that invest in research and development to deliver high-performance electrical steel with improved magnetic and mechanical behavior will find themselves well-placed to fill the increasing demand. Moreover, working with OEM and EV manufacturers in co-developing customized steel solutions can further boost market penetration. With industries continuously breaking performance thresholds, the need for high-frequency and lightweight electrical steel is a rich opportunity for material developers and manufacturers alike.

Electrical Steel Market Scope

Electrical Steel Market Report Segmentation Analysis

The Global Electrical Steel Market industry analysis is segmented by Product Type, by Application, and by Region.

The non-grain-oriented electrical steel segment is anticipated to hold the highest share of the global electrical steel market during the projected timeframe

By Product Type, the electrical steel market is divided into grain-oriented electrical steel and non-grain-oriented electrical steel. Of these, the non-grain oriented electrical steel segment will have the largest market share during the forecast period and account for nearly 57.4% worldwide. Non-grain oriented (NGO) electrical steel finds extensive use in a wide range of rotating machines, including motors and generators, owing to its uniform magnetic characteristics across all directions. This makes it the ideal choice to be used in electric vehicles, industrial machinery, domestic appliances, and small transformers. The increased popularity of electric vehicles and the ongoing wave of industrial automation are the key factors propelling the use of NGO steel significantly. Its cost-effectiveness and versatility also make it the choice for mass-produced electrical appliances. As the need for energy savings and efficiency is increasing across the world, manufacturers are placing greater emphasis on the production of high-performance variants of the non-grain-oriented steel as well, further increasing this segment’s dominance in the market.

The transformer segment is anticipated to hold the highest share of the market over the forecast period

Based on application, the market for electrical steel can be divided based on its use in transformers, motors, inductors, and other applications. The transformer segment is expected to account for the largest share in the market during the forecast period. Electrical steel is a key material used in transformer cores since it provides superior magnetic behavior and reduces core losses and thereby improving the efficiency of transmission and distribution networks. Increasing electricity demand across the world and large-scale investments in the modernization of the power infrastructure and integration of renewable energy sources with national grids are driving the requirement for efficient transformers. Grain-oriented electrical steel is particularly used extensively in power and distribution transformers owing to its low energy loss and high permeability. Urbanization and the process of rural electrification, particularly in the emerging economies, are also driving the installation of new transformers and thereby the growth in this segment further. Increasing the use of energy-efficient and sustainable forms of electricity and electricity transmission and distribution will also lead to the enhanced use of electrical steel in transformer applications

The following segments are part of an in-depth analysis of the global electrical steel market:

Electrical Steel Market Share Analysis by Region

Asia Pacific is projected to hold the largest share of the global electrical steel market over the forecast period

Asia Pacific led the global market for electrical steel in 2024 with a considerable 40.5% share and will continue to lead the market over the forecast period. The region’s supremacy is also driven significantly by the fast-growing industrialization, development of city infrastructure, and investment in energy and automotive sectors in countries such as China, India, Japan, and South Korea. China is the largest producer and user of electrical steel due to its strong manufacturing sector, expanding grid infrastructure networks, and dominance in electric vehicle manufacturing. India, too, is seeing increasing use of transformers, motors, and electrical appliances as it moves aggressively towards electrification, the use of renewable energy sources, and the modernization of its infrastructure. The high emphasis put on the region of Asia Pacific towards energy efficiency, installation of renewable energy sources, and use of smart grid technologies is also propelling market growth further. Rising use of the non-grain oriented electrical steel in the field of consumer electronics and electric vehicles, and grain-oriented steel in the field of power transformers, is generating tremendous business opportunities in the hands of the manufacturers in the region. Domestic production and technological innovation in the usage of electrical steel are also being encouraged through government policies and measures such as China’s “Made in China 2025” and India’s “Make in India” initiative.

North America is expected to witness the highest CAGR over the forecast period due to increased investments in the upgrade of the grid to smart grid standards, increasing electric vehicle popularity, and the drive towards energy-efficient infrastructure. The United States and Canada are increasingly making sustainable energy a target and upgrading their electrical infrastructure, and this is expected to accelerate the use of advanced electrical steel products over the next few years

Electrical Steel Market Analysis - Competition Landscape

The global electrical steel market is marked by robust competition among key players focusing on innovation, strategic expansion, and sustainability. Continuous research and development efforts lead to the introduction of advanced electrical steel products with improved performance characteristics, catering to evolving industry demands.

Global Electrical Steel Market Recent Developments News:

• In June 2022: Voestalpine's high-performance metals division inaugurated a new special steel plant in Kapfenberg, with an annual production capacity of 205,000 tons to serve aerospace, automotive, and oil & gas sectors.
• In April 2022: POSCO expanded its non-oriented electrical steel sheet production with a new 300,000-ton plant in Gwangyang, targeting 400,000 tons/year capacity by 2025 to meet growing demand for high-efficiency steel.

The Global Electrical Steel Market is dominated by a few large companies, such as

●        Benxi Steel Group Co., Ltd

●        CSC Steel Sdn. Bhd.

●        Tata Steel

●        Nucor Corporation

●        NLMK

●        ArcelorMittal S.A.

●        Shougang Group

●        thyssenkrupp Steel

●        Baosteel Group Corporation

●        POSCO

●        NIPPON STEEL CORPORATION

●        Voestalpine Group

●        Yieh Corporation

●        Aperam S.A.

●        Arnold Magnetic Technologies

●        Others