Grained Electrical Steel Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Product Type (Conventional, High Magnetic Strength Sheets, and Domain Refinement), By Thickness (0.2 mm and Below, 0.23 mm, 0.27 mm, 0.30 mm, and 0.35 mm and Above), By Application (Transformer, Power Generator, Electric Motor, and Others), By Region, By Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 10.34 Billion
CAGR (2026-2031)	7.59%
Fastest Growing Segment	Transformer
Largest Market	Asia Pacific
Market Size (2031)	USD 16.04 Billion

Market Overview

The Global Grained Electrical Steel Market will grow from USD 10.34 Billion in 2025 to USD 16.04 Billion by 2031 at a 7.59% CAGR. Grained electrical steel is a specialized ferromagnetic alloy engineered with a specific crystal alignment to minimize magnetic energy loss and facilitate efficient unidirectional magnetization. This material serves as a critical core component in the manufacturing of power transformers and large generators which are essential for high voltage energy transmission. The market is primarily supported by the extensive modernization of aging electrical grids and the global transition toward renewable energy sources that necessitates efficient power distribution infrastructure. Additionally, stringent government regulations regarding energy efficiency standards for industrial equipment continue to drive the demand for high permeability steel grades.

According to the Chinese Society for Metals, in 2024, the total production volume of grain oriented electrical steel in China reached 2.95 million tonnes which represented a year on year increase of approximately 12 percent. Despite this growth, the market faces a significant challenge regarding the volatility of raw material prices and supply chain instabilities that can disrupt production schedules and inflate manufacturing costs for producers globally.

Key Market Drivers

The Rapid Expansion of Renewable Energy Generation Capacity serves as a foundational catalyst for the market, fundamentally altering the requirements for power transmission hardware. As nations transition toward cleaner energy matrices, the intermittent nature of solar and wind power necessitates a more robust and responsive grid architecture, which directly intensifies the reliance on high-efficiency transformers and their grain-oriented electrical steel cores. This surging need for grid strengthening is quantified by recent consumption metrics; according to the International Energy Agency, February 2025, in the 'Electricity 2025' report, global electricity demand rose by 4.3 percent in 2024, driven largely by accelerated electrification and industrial activity. Consequently, utilities are compelled to upgrade transmission networks, sustaining a high volume of orders for premium magnetic steel grades that ensure grid stability and minimize energy losses during distribution.

Concurrently, the Expansion of Hyperscale Data Centers and IT Infrastructure is reshaping the supply landscape, necessitating significant capital infusion into manufacturing capabilities to meet specialized requirements. High-performance computing clusters demand ultra-efficient power distribution systems to manage thermal loads, prompting steel producers to scale up operations for high-permeability alloys used in data center power units. Responding to this critical need, according to JFE Steel, August 2025, in the 'Regarding the Expansion of Electrical Steel Manufacturing Capacity in India' update, the company confirmed a total investment of approximately 290 billion yen to bolster its production infrastructure. However, the sector remains subject to operational volatility; according to Cleveland-Cliffs, in 2025, the company reported that its shipments of stainless and electrical steel products declined by 17 percent in the preceding year, reflecting the persistent complexities within the specialized steel supply chain.

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Key Market Challenges

The volatility of raw material prices and supply chain instabilities presents a substantial barrier to the steady expansion of the Global Grained Electrical Steel Market. Manufacturers rely on a consistent flow of high-quality inputs to maintain the precise magnetic properties required for these alloys, and any disruption in the supply chain leads to immediate production delays. Furthermore, erratic fluctuations in the cost of essential raw materials and energy create an unpredictable pricing environment. This forces producers to inflate manufacturing costs, which subsequently deters investment from utility providers who are operating under fixed budgets for grid infrastructure projects.

This economic uncertainty contributes to a broader hesitation in industrial uptake and limits the volume of material that can be profitably brought to market. According to the World Steel Association, in 2024, global steel demand was projected to contract by 0.9 percent, a decline driven largely by persistent high inflation and manufacturing cost volatility. As grained electrical steel is a capital-intensive segment of the wider steel industry, this contraction reflects the direct negative impact of cost instability, hampering the ability of suppliers to scale operations effectively to meet long-term energy transmission goals.

Key Market Trends

The Emergence of Hydrogen-Based Green Steel Production Processes is fundamentally transforming the manufacturing landscape as producers strive to mitigate Scope 1 and Scope 2 emissions. This trend is driven by stringent industrial decarbonization mandates that compel steelmakers to replace carbon-intensive blast furnaces with hydrogen-based direct reduction technologies, thereby reducing the embedded carbon footprint of the ferromagnetic cores used in electrical equipment. This shift is quantified by ambitious production targets; according to Voestalpine, September 2025, in the 'greentec steel' progress report, the company confirmed its objective to manufacture approximately 2.5 million tons of CO2-reduced steel annually starting from 2027, explicitly including electrical steel grades for wind turbines within this low-emission portfolio.

Simultaneously, the market is witnessing the Localization of Premium Grade Manufacturing via Strategic Joint Ventures to bypass trade barriers and secure regional supply chains. By establishing production hubs closer to key demand centers, global steel leaders are mitigating the risks associated with cross-border logistics and protectionist tariffs while ensuring the availability of high-value alloys. A prime example of this strategy is evident in recent industrial collaborations; according to JFE Steel, December 2025, in its strategic partnership announcement, the company committed to an investment of 157.5 billion rupees (approximately 1.75 billion USD) to acquire a 50 percent stake in a joint venture with JSW Steel, aiming to localize the production of high value-added products, including specialized electrical steel sheets, within the Indian market.

Segmental Insights

The transformer segment has emerged as the fastest-growing area in the global grained electrical steel market due to intensified efforts toward grid modernization and energy expansion. This growth is largely fueled by the increasing integration of renewable energy sources which necessitate robust transmission infrastructure. Additionally, strict energy efficiency regulations enforced by authorities such as the U.S. Department of Energy compel manufacturers to reduce power distribution losses. These mandates require the utilization of high-quality grain-oriented steel in transformer cores, thereby sustaining a strong upward trajectory for this specific market segment.

Regional Insights

The Asia Pacific region maintains a dominant position in the global grained electrical steel market, primarily driven by substantial investments in power transmission and distribution infrastructure. Rapid industrialization and urbanization in major economies such as China and India create consistent demand for power transformers, which serves as the key application for this material. Extensive grid modernization initiatives led by entities like the State Grid Corporation of China require significant volumes of high-grade steel to support efficient energy transport. Furthermore, the strong presence of established steel manufacturers in the region ensures a stable supply chain for local utility projects.

Recent Developments

• In September 2024, ThyssenKrupp Steel presented its latest advancements in electrical steel technology at the Coiltech trade fair in Pordenone, Italy. The company introduced innovative "powercore Traction" grades, which include specialized grain-oriented electrical steel strips optimized for use in highly efficient axial flux motors. These new grades are designed to significantly reduce remagnetization losses and improve the power density of electric drive systems. This launch highlights the company's research breakthrough in adapting grain-oriented materials, traditionally used in transformers, for cutting-edge electromobility applications to extend vehicle range and enhance performance.
• In July 2024, Cleveland-Cliffs announced a strategic investment of $150 million to establish a new production plant for electrical distribution transformers in Weirton, West Virginia. This initiative marks a downstream expansion for the company, directly utilizing its own American-made grain-oriented electrical steel produced at the Butler Works facility. The Chairman of Cleveland-Cliffs stated that the new plant aims to address the critical shortage of transformers in the United States and support the modernization of the electric grid. The facility will repurpose an existing warehouse and is expected to create employment opportunities for workers from a recently idled tinplate mill.
• In June 2024, Baoshan Iron & Steel Co (Baosteel) announced that its specialized production line for grain-oriented electrical steel had entered full operation at its Shanghai base. This development, part of the company's product optimization strategy, increased Baosteel's annual capacity for this material to 1.16 million tonnes. The new line focuses on manufacturing high-grade, thin-gauge grain-oriented electrical steel with a thickness of 0.2 mm or less, designed to meet the stringent efficiency requirements of modern energy transmission equipment. The project incorporates advanced annealing technologies to enhance magnetic properties and reduce energy losses in downstream applications like transformers.
• In February 2024, JSW Steel and JFE Steel officially broke ground on a new manufacturing facility for grain-oriented electrical steel in Karnataka, India. This project, conducted through their joint venture, JSW JFE Electrical Steel Private Limited, involves a substantial investment equivalent to approximately US$670 million. The facility represents a significant collaboration aimed at establishing a full integrated production system for this critical material within India, targeting a production commencement in fiscal year 2027. The joint venture plans to cater to the surging demand for energy-efficient transformers and power infrastructure in the region by leveraging JFE Steel's advanced technological capabilities.

Key Market Players

• Nippon Steel Corporation
• POSCO
• ArcelorMittal
• Thyssenkrupp Steel
• Baowu Steel Group
• JFE Steel Corporation
• Voestalpine AG
• NLMK Group
• Aperam S.A.
• AK Steel Holdings Corporation

By Product Type	By Thickness	By Application	By Region
Conventional High Magnetic Strength Sheets Domain Refinement	0.2 mm and Below 0.23 mm 0.27 mm 0.30 mm 0.35 mm and Above	Transformer Power Generator Electric Motor Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Grained Electrical Steel Market, By Product Type:

• Conventional
• High Magnetic Strength Sheets
• Domain Refinement

• Grained Electrical Steel Market, By Thickness:

• 0.2 mm and Below
• 0.23 mm
• 0.27 mm
• 0.30 mm
• 0.35 mm and Above

• Grained Electrical Steel Market, By Application:

• Transformer
• Power Generator
• Electric Motor
• Others

• Grained Electrical Steel Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE