Electric Steel Market Size | Global Report [2033]

Electric Steel Market Overview

The Electric Steel Market size was valued at USD 28480.03 million in 2024 and is expected to reach USD 42232 million by 2033, growing at a CAGR of 4.4% from 2025 to 2033.

The electric steel market is a crucial segment of the global steel industry focused on manufacturing specialty steels used primarily in electrical equipment such as transformers, motors, generators, and inductors. In 2023, the global production of electric steel surpassed 14 million metric tons, with a significant portion dedicated to grain-oriented electrical steel (GOES) and non-grain oriented electrical steel (NGOES). Asia-Pacific accounts for over 55% of global production capacity, led by China and Japan, due to their robust manufacturing and electrical equipment sectors. In addition, North America and Europe together contribute around 30% of the market supply. The increasing adoption of electric vehicles, which rely on electric steel for motor components, and the expansion of renewable energy infrastructures continue to bolster demand. The electric steel market is characterized by high technological requirements, such as precise grain orientation and silicon alloying, enabling reduced core losses and improved magnetic properties. Approximately 70% of electric steel is utilized in the production of transformers, which serve as the backbone of electrical grids worldwide.

Key Findings

Top Driver: Increasing industrial demand for energy-efficient electrical components.

Top Country/Region: Asia-Pacific, especially China and Japan, dominate the market in both production and consumption.

Top Segment: Industrial applications, with transformers and electric motors leading demand.

Electric Steel Market Trends

Recent market trends highlight a shift towards technologically advanced electric steel variants that provide enhanced energy efficiency and reduce power losses in electrical machinery. In 2023, non-grain oriented electrical steel (NGOES) dominated with a share close to 65%, favored for its cost-effective production and versatile applications in motors and generators. Meanwhile, grain-oriented electrical steel (GOES), which constitutes around 35% of the market, is essential for high-efficiency transformers in power grids. The aerospace industry has increased its consumption of electric steel by approximately 18% over the past two years due to growing demand for lightweight and high-strength materials in aircraft motors and control systems. Meanwhile, municipal infrastructure projects focusing on smart grids and urban power distribution have driven demand for electric steel by more than 22% in regions investing heavily in infrastructure modernization. Another key trend is the rising interest in high-grade silicon steel, which contains up to 3% silicon, improving the steel’s electrical resistivity and magnetic permeability. These properties help reduce hysteresis losses, essential for energy-saving transformers and motors. Additionally, manufacturers are increasingly adopting eco-friendly production processes, reducing carbon emissions by over 15% per ton of electric steel produced, in response to tightening environmental regulations globally.

Electric Steel Market Dynamics

DRIVER

Rising Demand for Energy-Efficient Electrical Equipment

The primary growth driver of the electric steel market is the surge in demand for energy-efficient electrical devices, particularly in industrial and consumer sectors. Over 60% of the market's consumption comes from transformers and electric motors designed to minimize energy loss. Governments worldwide have introduced stringent energy efficiency standards impacting electric steel usage, fueling demand for high-performance grades. For instance, the US Department of Energy reported a 12% increase in the use of electric steel in motors compliant with new efficiency regulations in 2023. Furthermore, the expanding electric vehicle market relies heavily on NGOES for traction motors, contributing approximately 10% to market growth in 2023.

RESTRAINT

Volatility in Raw Material Prices

Price fluctuations of raw materials such as iron ore, silicon, and manganese create instability in electric steel production costs. Iron ore prices, which account for nearly 40% of the raw material cost, saw volatility of over 20% between 2022 and 2024, impacting manufacturers’ profitability. Furthermore, supply chain disruptions caused by geopolitical tensions and logistical challenges have increased lead times by up to 30%, resulting in delayed deliveries and reduced market responsiveness. The dependence on imports for high-purity silicon steel in regions like Europe has also escalated production costs, limiting expansion among smaller producers.

OPPORTUNITY

Growth in Renewable Energy Installations

The renewable energy sector presents a substantial opportunity for the electric steel market. Wind turbine generators and solar power transformers require high-performance electric steel, with demand growing by over 25% annually in key markets such as China, Germany, and the US. Governments have allocated over USD 300 billion in the last two years to renewable energy projects, directly impacting electric steel consumption. Technological advancements, including the development of ultra-thin electric steel sheets (thickness under 0.2 mm), enhance magnetic properties and efficiency, opening avenues for product innovation and increased market penetration.

CHALLENGE

High Manufacturing and Processing Costs

The production of electric steel requires sophisticated manufacturing processes such as precise annealing, rolling, and coating to achieve the desired electrical and magnetic properties. These processes contribute to operating costs which are approximately 15-20% higher compared to standard steel manufacturing. Moreover, quality control standards for aerospace and energy sectors impose strict material requirements, resulting in higher rejection rates and production inefficiencies. Investment in R&D to improve electric steel properties, including grain orientation and coating durability, adds to financial pressures. Consequently, smaller manufacturers struggle to compete, leading to market consolidation.

Electric Steel Market Segmentation

Electric steel is segmented by type and application, each influencing market dynamics differently.

By Type

Industrial: Industrial electric steel constitutes about 50% of total consumption, primarily for transformers and electric motors used in manufacturing plants and power distribution systems. The industrial segment's growth aligns with increasing electrification and industrial automation globally.
Aerospace and Defence: This segment accounts for around 20% of market consumption, focusing on specialized electric steel grades with enhanced strength-to-weight ratios. The aerospace industry’s adoption of electric steel has increased by nearly 15% in the last three years, driven by rising production of electric propulsion systems and defense electronics.
Municipal Infrastructure: Electric steel use in municipal infrastructure, including smart grids and urban transit systems, makes up approximately 18% of the market. Investments in grid modernization, smart meters, and electrification of public transport are driving growth, particularly in North America and Europe.
Others: This category, representing about 12% of the market, includes consumer electronics, renewable energy systems, and niche industrial applications. Technological advancements continue to diversify product offerings in this segment.

By Application

Improved Carbon Structural Steel: This type accounts for roughly 35% of electric steel production, favored for its balance of strength and electrical properties. It is widely used in industrial transformers and motors.
Tool Steel: Tool steel comprises around 22% of market demand, critical for manufacturing dies and machinery parts requiring wear resistance and magnetic efficiency.
Alloy Steel: Alloy steel, representing about 28% of consumption, is preferred for applications demanding higher mechanical performance, including aerospace components and defense equipment.
Others: The remaining 15% covers specialty electric steels used in renewable energy, consumer appliances, and emerging sectors, driven by innovation in material composition.

Electric Steel Market Regional Outlook

North America

North America is witnessing steady growth in electric steel consumption, led by the US and Canada. The region's focus on upgrading aging electrical infrastructure and growing electric vehicle production supports increased demand. Approximately 1.5 million metric tons of electric steel were consumed in North America in 2023, with the renewable energy sector accounting for 25% of this volume.

Europe

Europe continues to be a major market, with Germany, France, and Italy leading due to strict environmental regulations and investments in smart grids. The European electric steel market reached 1.8 million metric tons in 2023, with growth fueled by demand from automotive and renewable energy sectors. The shift toward green steel production methods has accelerated investments in electric steel manufacturing plants.

Asia-Pacific

Asia-Pacific dominates the global electric steel market with consumption exceeding 7.5 million metric tons in 2023. China alone accounts for over 60% of this volume, driven by rapid industrialization, urbanization, and expansion of the energy grid. India and Japan are also significant contributors, with strong growth in renewable energy and electric vehicle manufacturing.

Middle East & Africa

The Middle East & Africa is an emerging market, with demand reaching approximately 450,000 metric tons in 2023. Countries such as Saudi Arabia, UAE, and South Africa are investing heavily in infrastructure and diversification, boosting electric steel consumption in power generation and industrial applications.

List of Top Electric Steel Market Companies

Baowu
ArcelorMittal
JFE Steel
Shougang
TISCO
NSSMC
NLMK Group
AK Steel
ThyssenKrupp
Ansteel
Masteel
Posco
Cogent (Tata Steel)
Voestalpine
Benxi Steel
APERAM
Nucor
ATI
Stalprodukt S.A.
CSC

Top Two Companies with Highest Shares

Baowu Steel Group: Baowu Steel Group is the largest electric steel producer in China, commanding over 20% of the global market share. In 2023, Baowu produced more than 3 million metric tons of electric steel, focusing on high-grade grain-oriented and non-grain oriented products. The company has invested over USD 500 million in R&D facilities to improve electric steel quality and energy efficiency.
ArcelorMittal: ArcelorMittal, headquartered in Luxembourg, is a global steel giant with electric steel production exceeding 1.8 million metric tons annually. The company operates advanced manufacturing plants across North America and Europe and has committed substantial investments towards sustainable steelmaking technologies, reducing CO2 emissions by 18% in recent years.

Investment Analysis and Opportunities

Investment opportunities in the electric steel market are significant, particularly with the global push for renewable energy and energy-efficient infrastructure. In 2023, total capital expenditure in the electric steel sector exceeded USD 2 billion globally, focusing on capacity expansion and technology upgrades. The Asia-Pacific region attracted over 55% of these investments, aligning with increased demand for electric vehicles and grid modernization. Strategic investments in electric steel production facilities that utilize eco-friendly processes, such as electric arc furnaces and hydrogen-based reduction technologies, are gaining traction. These methods reduce carbon emissions by up to 50% compared to traditional blast furnaces. Additionally, companies investing in ultra-thin electric steel production are tapping into new market segments such as high-efficiency transformers and compact motors. Government incentives and subsidies aimed at accelerating the adoption of clean energy technologies further enhance the investment climate. For example, in 2023, North American and European governments collectively allocated over USD 1 billion for projects integrating electric steel in smart grid and renewable energy applications. Furthermore, mergers and acquisitions are becoming prominent investment strategies. The acquisition of smaller electric steel producers by industry leaders is consolidating the market and enabling enhanced R&D and production capabilities.

New Product Development

Product innovation remains a critical focus in the electric steel market, with manufacturers introducing grades that offer improved magnetic properties, reduced core losses, and better mechanical strength. In 2023, several companies launched ultra-thin electric steel sheets with thicknesses as low as 0.18 mm, which improve transformer efficiency by up to 10%. Developments in coating technologies have enhanced insulation and corrosion resistance of electric steel. For instance, advanced inorganic coatings now cover over 30% of the electric steel market, reducing eddy current losses and increasing durability in harsh environments. Manufacturers have also introduced specialized high-silicon steel grades, containing up to 3.5% silicon, which provide superior electrical resistivity and magnetic permeability. These steels are critical for high-frequency electrical applications, including aerospace and telecommunications. Furthermore, the integration of digital quality control and real-time monitoring systems in manufacturing plants has improved product consistency, reducing defect rates by approximately 15%. The combination of these innovations is enabling manufacturers to meet stricter energy efficiency and environmental standards globally.

Five Recent Developments

In late 2023, Baowu Steel Group inaugurated a new electric steel production facility with an annual capacity of 500,000 metric tons, incorporating advanced grain orientation technologies.
ArcelorMittal completed an upgrade to its European electric steel plants, reducing production-related CO2 emissions by 18% and increasing output by 7%.
JFE Steel launched a new low-loss grain-oriented steel variant with thickness under 0.20 mm, enhancing transformer efficiency by 12%.
POSCO introduced a silicon steel with enhanced corrosion resistance, capturing over 10% of the South Korean electric steel market within its first year.
ThyssenKrupp signed a strategic partnership to develop hydrogen-based steelmaking technologies targeting the electric steel segment, aiming to cut carbon emissions by 40% by 2025.

Report Coverage of Electric Steel Market

This report provides an extensive overview of the global electric steel market, encompassing production trends, key players, and technological advancements. It covers segmentation by type—industrial, aerospace and defense, municipal infrastructure, and others—and by application such as improved carbon structural steel, tool steel, alloy steel, and others. The regional outlook includes North America, Europe, Asia-Pacific, and Middle East & Africa, providing a comprehensive view of consumption patterns and growth areas. The report also presents deep insights into market dynamics, including drivers, restraints, opportunities, and challenges, backed by numerical data. In addition, it includes a detailed investment analysis, highlighting capital flow trends and strategic priorities of leading firms. New product developments and recent strategic initiatives by top companies further enrich the report. Altogether, this report equips stakeholders with the necessary insights to make informed decisions in the evolving electric steel market.