Electrical Steel Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Type (Grain Oriented Electrical Steel, Non-Grain Oriented Electrical Steel), By Application (Transformers, Motors & Generators, Inductors), By Vertical (Automotive, Construction, Manufacturing, Energy & Power Others), By Region, By Competition, 2020-2030F

Market Overview

Global Electrical Steel Market was valued at USD 25.78 billion in 2024 and is expected to reach USD 36.52 billion by 2030 with a CAGR of 5.82% during the forecast period. The Electrical Steel Market encompasses the global production, distribution, and utilization of specialized steel alloys designed to enhance the efficiency of electrical devices by minimizing energy loss due to hysteresis and eddy currents. Electrical steel, also known as silicon steel or transformer steel, is primarily categorized into grain-oriented electrical steel (GOES) and non-grain-oriented electrical steel (NGOES), each serving distinct applications in power generation, distribution, and electric motor manufacturing. GOES is widely used in transformers, where its high permeability and low core loss characteristics improve the efficiency of electrical transmission systems, while NGOES finds extensive application in motors, generators, and other rotating machinery, ensuring optimal magnetic performance and energy conservation.

Key Market Drivers

Rising Demand for Energy-Efficient Transformers and Motors

The growing global emphasis on energy efficiency is a key driver for the electrical steel market, particularly in the development of high-performance transformers and motors. Governments and regulatory bodies worldwide are enforcing stringent energy-efficiency standards, such as the Minimum Energy Performance Standards (MEPS) and the European Union’s Ecodesign Directive, which mandate lower energy losses in electrical equipment. Electrical steel, particularly grain-oriented electrical steel (GOES), plays a crucial role in reducing core losses in transformers, thereby improving energy efficiency. Additionally, non-grain-oriented electrical steel (NGOES) is widely used in electric motors, which are integral to various industrial and consumer applications, including HVAC systems, home appliances, and industrial automation.

The increasing adoption of energy-efficient motors, driven by global sustainability goals and the need to cut operational costs, is propelling the demand for high-quality electrical steel. Moreover, the transition towards smart grids and renewable energy integration requires advanced transformers that can handle fluctuating loads efficiently. With the rise in urbanization and industrialization, particularly in developing economies, the demand for electricity is surging, necessitating the expansion and modernization of power infrastructure. This, in turn, fuels the demand for electrical steel, as it is a core material in electrical transmission and distribution equipment. Furthermore, technological advancements in electrical steel production, such as the development of high-permeability and laser-scribed grain-oriented steel, are enhancing its performance characteristics, further driving its adoption. The increasing focus on sustainability and carbon footprint reduction by industries is also influencing the demand for energy-efficient electrical equipment, thereby strengthening the market growth for electrical steel. The global energy-efficient motor market is projected to reach USD 84.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of 6.38% till 2032. 

Expansion of the Electric Vehicle (EV) Industry

The rapid growth of the electric vehicle (EV) industry is significantly driving the electrical steel market, as EV motors, battery systems, and charging infrastructure rely heavily on high-performance electrical steel for optimal efficiency. With governments worldwide implementing stringent emission norms and offering incentives for EV adoption, automakers are ramping up their production of electric vehicles, thereby increasing the demand for non-grain-oriented electrical steel (NGOES), which is a key material in EV motors. The high magnetic permeability and low core loss properties of NGOES enhance the efficiency of electric motors, contributing to improved vehicle performance and extended battery life. Additionally, the development of high-speed and high-torque EV motors requires advanced electrical steel grades that can handle increased electrical and thermal stresses. As battery technology evolves, electrical steel is also becoming crucial in EV charging infrastructure, including transformers and inductors used in charging stations.

The global shift towards sustainable transportation is further intensifying research and development efforts focused on improving electrical steel’s properties to enhance motor efficiency and reduce vehicle weight. Key automakers and component manufacturers are increasingly investing in innovative electrical steel solutions to optimize motor design and meet evolving efficiency standards. Furthermore, the rising adoption of hybrid vehicles, which use both internal combustion engines and electric motors, is further bolstering the demand for high-performance electrical steel. As EV penetration continues to grow, driven by advancements in battery technology, increasing consumer awareness, and supportive government policies, the electrical steel market is poised for substantial growth. The establishment of new EV manufacturing plants and charging networks, particularly in regions like North America, Europe, and Asia-Pacific, is expected to create long-term demand for electrical steel, further solidifying its role in the automotive industry’s transformation. By 2032, the global EV market is expected to grow to USD 1,891.08 billion, indicating a compound annual growth rate (CAGR) of 13.8% during the forecast period.

Increasing Investments in Renewable Energy Projects

The surge in renewable energy investments, particularly in wind and solar power projects, is another major factor driving the electrical steel market. Electrical steel is a critical component in power generation and transmission equipment used in renewable energy systems, including transformers, generators, and power converters. Governments and private sector players worldwide are heavily investing in renewable energy infrastructure to reduce reliance on fossil fuels and meet global climate targets. Wind turbines, for instance, require high-grade electrical steel in their generators to enhance magnetic flux and minimize energy losses, thereby improving overall efficiency. With the rapid expansion of offshore and onshore wind farms, the demand for electrical steel is escalating, as modern wind turbines are designed with larger capacities and advanced generator technologies. Similarly, solar power installations require efficient transformers and inverters, which rely on electrical steel for energy conversion and distribution. As countries aim to increase their share of renewable energy in the energy mix, substantial grid upgrades are necessary to accommodate variable energy sources.

Smart grid technologies, which facilitate efficient energy management and load balancing, also depend on electrical steel components in transformers and switchgear. The growing trend of decentralized energy generation, driven by residential and commercial solar panel installations, is further boosting the need for compact and efficient electrical transformers, increasing the consumption of electrical steel. Moreover, government incentives and policy frameworks, such as tax credits, feed-in tariffs, and renewable energy mandates, are accelerating the deployment of clean energy projects, consequently driving the demand for electrical steel. As the renewable energy sector continues to expand, with large-scale investments in wind, solar, and grid modernization initiatives, the electrical steel market is expected to witness sustained growth, reinforcing its critical role in the global energy transition. The International Energy Agency (IEA) projected that global energy investment would exceed USD 3 trillion for the first time in 2024, with USD 2 trillion directed towards clean energy technologies and infrastructure. 

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Key Market Challenges

Volatility in Raw Material Prices

One of the major challenges facing the electrical steel market is the volatility in raw material prices, particularly iron ore and alloying elements such as silicon and aluminum. Electrical steel production heavily depends on these materials, and any fluctuation in their prices directly impacts the overall manufacturing cost. Iron ore, a primary component in steelmaking, has seen significant price swings due to factors such as global supply chain disruptions, geopolitical tensions, and environmental regulations affecting mining operations. Similarly, alloying elements like silicon and aluminum, which enhance the electrical and magnetic properties of steel, are subject to price fluctuations due to variations in global demand, trade restrictions, and extraction difficulties.

The unpredictability of these costs makes it challenging for electrical steel manufacturers to maintain stable pricing and profit margins, leading to financial uncertainties and reduced competitiveness. Additionally, increased energy costs, driven by rising electricity and fuel prices, further add to the financial burden, making production more expensive. Many steel producers attempt to mitigate these cost fluctuations by securing long-term contracts with raw material suppliers or investing in recycling technologies, but these strategies do not fully shield them from unexpected market disruptions.

The situation is further complicated by trade policies and tariffs imposed by various governments, which can either restrict or increase the cost of raw material imports, leading to supply chain constraints. As a result, manufacturers often face difficulties in passing increased costs to end users, especially in highly competitive industries such as automotive, power generation, and consumer electronics, where price sensitivity is high. This challenge also impacts research and development (R&D) efforts, as companies may struggle to allocate sufficient resources for innovation when grappling with unstable material costs. In the long run, this market volatility could slow down the adoption of advanced electrical steel grades designed for high-efficiency applications, thereby impeding overall market growth.

Environmental Regulations and Sustainability Concerns

The electrical steel market is increasingly challenged by stringent environmental regulations and growing sustainability concerns, which put significant pressure on manufacturers to adopt cleaner and more energy-efficient production processes. Steel production is an energy-intensive process that generates high levels of carbon dioxide (CO₂) emissions, contributing to global climate change. Governments and regulatory bodies worldwide are tightening environmental policies to reduce industrial emissions, enforce stricter waste disposal regulations, and encourage the adoption of greener manufacturing technologies. For instance, the European Union’s Carbon Border Adjustment Mechanism (CBAM) and similar initiatives in other regions aim to impose taxes on high-carbon imports, forcing steel manufacturers to invest in costly decarbonization measures such as hydrogen-based steelmaking or electric arc furnace (EAF) technology.

Additionally, many countries are mandating the use of low-carbon or recycled materials, which may not always be feasible due to supply limitations and high costs. Compliance with these regulations requires substantial capital investments in cleaner production technologies, energy-efficient machinery, and sustainable raw material sourcing, which can strain the financial resources of steel manufacturers, particularly small and medium-sized enterprises (SMEs). Furthermore, sustainability concerns from consumers and corporate buyers are pushing manufacturers to demonstrate environmental responsibility through certifications and eco-friendly product lines, further increasing operational costs. While initiatives such as carbon capture and storage (CCS) and circular economy practices offer potential solutions, their implementation remains complex and expensive. Companies that fail to meet evolving regulatory and sustainability standards risk facing penalties, trade restrictions, and a loss of market share as environmentally conscious buyers shift towards greener alternatives.

Additionally, the transition towards electric vehicles (EVs) and renewable energy infrastructure, which heavily rely on high-grade electrical steel, requires manufacturers to balance sustainability goals with performance and cost-effectiveness. The challenge is further exacerbated by inconsistent regulatory frameworks across different regions, making global compliance even more difficult. As environmental policies continue to evolve, manufacturers must navigate an increasingly complex landscape that demands continuous innovation and adaptation, which could slow down market growth and increase production costs in the long term.

Key Market Trends

Rising Adoption of Electric Vehicles (EVs) Driving Demand for High-Performance Electrical Steel

The growing adoption of electric vehicles (EVs) worldwide is significantly driving the demand for high-performance electrical steel, particularly non-grain-oriented electrical steel, which is crucial for enhancing the efficiency of electric motors and powertrain components. Governments across various regions are pushing for stricter emission regulations, subsidies, and incentives for EV adoption, leading automakers to accelerate their transition towards electrification. This shift is increasing the need for advanced electrical steel grades that offer superior magnetic properties, reduced energy loss, and higher efficiency.

Non-grain-oriented electrical steel is widely used in EV motors due to its uniform magnetic properties, which enhance energy conversion efficiency and minimize core losses. With EV sales expected to surge in the coming years, manufacturers are investing in the development of high-silicon and ultra-thin electrical steel variants to meet the stringent efficiency requirements of modern electric drivetrains. Additionally, automakers and steel producers are forming strategic collaborations to ensure a steady supply of premium-grade electrical steel to cater to the burgeoning EV market.

The push towards high-frequency motors in EVs further necessitates the use of innovative electrical steel grades with better permeability and lower core loss, fostering advancements in material science and steel processing technologies. As automakers scale up production capacities for EVs and battery electric vehicles (BEVs), the demand for high-grade electrical steel will continue to witness an upward trajectory, making it a key growth driver for the electrical steel market in the coming years.

Expansion of Renewable Energy Projects Fueling Demand for Electrical Steel

The rapid expansion of renewable energy projects, particularly wind and solar power, is creating a strong demand for electrical steel, especially grain-oriented electrical steel (GOES), which is widely used in transformer cores to enhance energy efficiency and reduce power losses. Governments and energy companies worldwide are investing heavily in renewable energy infrastructure to achieve carbon neutrality and reduce reliance on fossil fuels. As the integration of renewable energy sources into the power grid grows, the need for efficient and reliable transformers and electrical components becomes increasingly critical.

Electrical steel plays a crucial role in power distribution and energy transmission, making it indispensable for grid modernization efforts. Additionally, offshore and onshore wind farms require high-efficiency transformers and generators, which rely on premium electrical steel to optimize energy conversion and minimize losses. The growing emphasis on sustainable energy solutions is also driving research into advanced electrical steel grades with improved magnetic properties, reduced hysteresis loss, and higher resistance to corrosion. Manufacturers are focusing on enhancing production capabilities to cater to the increasing demand from the renewable energy sector, with key players investing in new production lines and upgrading existing facilities. As global energy policies continue to favor clean energy initiatives, the electrical steel market is poised to benefit significantly from the continued expansion of wind and solar power projects, further reinforcing its role in the global energy transition.

Segmental Insights

Type Insights

The Grain Oriented Electrical Steel segment held the largest Market share in 2024. The Grain-Oriented Electrical Steel (GOES) segment in the Electrical Steel Market is experiencing significant growth due to increasing demand for energy-efficient electrical transformers and power distribution systems. As global electricity consumption rises, particularly in emerging economies, utilities and grid operators are prioritizing high-performance materials that reduce energy losses and enhance system efficiency. GOES is a crucial material in transformer cores, enabling lower hysteresis and eddy current losses, which significantly improves energy efficiency in power transmission.

Moreover, government regulations and policies emphasizing energy conservation, such as Minimum Energy Performance Standards (MEPS) and initiatives for smart grid modernization, are driving the adoption of GOES. The expansion of renewable energy infrastructure, particularly wind and solar power, further propels the demand for transformers and, consequently, high-quality electrical steel. Additionally, urbanization and industrialization are fueling investments in substations and power grids, increasing the need for durable and efficient electrical steel solutions. Technological advancements in GOES manufacturing, such as the development of ultra-thin grades with superior magnetic properties, are enhancing the performance of transformers, further driving market growth.

The automotive sector is also emerging as a new growth avenue for GOES, particularly in the development of electric vehicle (EV) charging stations and onboard transformers, which require high-efficiency electrical steel components. Major players in the industry are investing in R&D and capacity expansion to cater to the rising demand, with companies focusing on sustainable and high-performance materials to align with global decarbonization goals. Additionally, trade policies, supply chain optimizations, and strategic collaborations among manufacturers and utility providers are fostering market expansion. However, raw material price volatility remains a challenge, prompting manufacturers to explore cost-effective production techniques. Overall, the GOES segment is poised for robust growth, driven by the escalating need for energy-efficient power distribution, advancements in material science, and the rapid transition towards renewable energy and smart grid systems.

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Regional Insights

North America region held the largest market share in 2024. The electrical steel market in North America is experiencing significant growth, driven by the rising demand for energy-efficient transformers and electric motors across various industries, including power generation, automotive, and consumer appliances. With the region's increasing focus on renewable energy integration, utilities are investing heavily in grid modernization, which necessitates the deployment of high-performance transformers and generators made from electrical steel to minimize energy losses and enhance efficiency. Additionally, the surge in electric vehicle (EV) production in North America, supported by government incentives and stringent emission regulations, is fueling the demand for high-grade electrical steel in EV motors, battery charging infrastructure, and powertrain components.

The automotive sector’s transition towards electrification, including hybrid and fully electric vehicles, has intensified the need for non-grain-oriented (NGO) electrical steel, which improves motor performance and efficiency. Moreover, the expanding industrial sector, driven by automation and smart manufacturing initiatives, is propelling the use of electrical steel in high-efficiency motors to optimize energy consumption and reduce operational costs. The North American construction industry is also contributing to market growth, with increasing installations of HVAC systems and smart electrical grids that rely on electrical steel components. Furthermore, stringent energy-efficiency regulations set by organizations such as the U.S. Department of Energy (DOE) and the Canadian Standards Association (CSA) are pushing manufacturers toward adopting advanced electrical steel grades with superior magnetic properties to comply with performance and sustainability standards.

Technological advancements in electrical steel manufacturing, including the development of high-silicon and low-core-loss steel variants, are further enhancing product adoption, as they offer better magnetic permeability and reduced hysteresis loss. Additionally, the presence of key market players in North America, coupled with rising investments in research and development, is fostering innovation in electrical steel production, leading to improved product quality and cost efficiency. The increasing reliance on distributed energy resources (DERs), such as solar and wind power, further underscores the need for electrical steel in power electronics and inverters, reinforcing its critical role in the region’s energy transition. As North America continues to prioritize sustainability, energy conservation, and electrification across industries, the demand for electrical steel is poised to expand, positioning the market for steady growth in the coming years.

Recent Developments

• In February 2025, ArcelorMittal revealed its decision to move forward with plans to construct a state-of-the-art manufacturing facility for non-grain-oriented electrical steel (NOES) in Alabama. This new facility, fully owned by ArcelorMittal, will have the capacity to produce up to 150,000 metric tons of NOES per year, contingent on the product mix. The plant will support a range of industries, including automotive and mobility, renewable energy production, and other commercial and industrial applications such as electric motors, generators, and specialized uses of NOES.
• In October 2023, United States Steel Corporation celebrated the launch of its new non-grain oriented (NGO) electrical steel line with a ribbon-cutting ceremony at the Big River Steel facility in Osceola, Arkansas. The successful commissioning of this line represents a major achievement for U.S. Steel, as it now has the capacity to produce more NGO electrical steel annually than any other domestic steelmaker. This development underscores the company's commitment to providing sustainable steel solutions that prioritize both environmental responsibility and the well-being of people.

Key Market Players

• Benxi Steel Group Co., Ltd
• Nucor Corporation
• Yieh Corporation
• Tata Steel UK Limited
• Arcelormittal Group
• Nippon Steel Corporation
• Arnold Magnetic Technologies
• JFE Steel Corporation

Report Scope:

In this report, the Global Electrical Steel Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Electrical Steel Market, By Type:

o   Grain Oriented Electrical Steel

o   Non-Grain Oriented Electrical Steel 

• Electrical Steel Market, By Application:

o   Transformers

o   Motors & Generators

o   Inductors 

• Electrical Steel Market, By Vertical:

o   Automotive

o   Construction

o   Manufacturing

o   Energy & Power

o   Others 

• Electrical Steel Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia-Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Kuwait

§  Turkey

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Electrical Steel Market.

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Company Information

• Detailed analysis and profiling of additional Market players (up to five).

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