|
Forecast Period
|
2026-2030
|
|
Market Size (2024)
|
USD 25.78 Billion
|
|
Market Size (2030)
|
USD 36.52 Billion
|
|
CAGR (2025-2030)
|
5.82%
|
|
Fastest Growing Segment
|
Non-Grain
Oriented Electrical Steel
|
|
Largest Market
|
North
America
|
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
|
By Type
|
By Application
|
By Vertical
|
By Region
|
- Grain Oriented
Electrical Steel
- Non-Grain Oriented Electrical Steel
|
- Transformers
- Motors
& Generators
- Inductors
|
- Automotive
- Construction
- Manufacturing
- Energy & Power
- Others
|
- North America
- Europe
- Asia Pacific
- South America
- Middle East & Africa
|
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.
Available Customizations:
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company's specific needs. The following customization options are available for
the report:
Company Information
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analysis and profiling of additional Market players (up to five).
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