Electrical Steel Market Size, Share, Growth, and Industry Analysis, By Type (Oriented Electrical Steels, Non-oriented Electrical Steels), By Application (Household, Industrial, Automotive), Regional Insights and Forecast to 2035

Electrical Steel Market Overview

The global Electrical Steel Market size estimated at USD 15060.17 million in 2026 and is projected to reach USD 37762.85 million by 2035, growing at a CAGR of 10.75% from 2026 to 2035.

The Electrical Steel Market is expanding steadily due to increasing demand from power transmission networks, electric vehicles, industrial motors, and energy-efficient transformers. Electrical steel accounts for nearly 95% of the core material used in modern power transformers and approximately 80% of high-efficiency industrial motors. Grain-oriented electrical steel delivers magnetic permeability above 1.90 Tesla, while non-oriented grades support motor efficiencies exceeding 96% in premium applications. More than 70% of newly installed distribution transformers use advanced electrical steel laminations to reduce core losses. Manufacturing thickness commonly ranges from 0.23 mm to 0.50 mm, with 0.27 mm sheets gaining widespread adoption for high-performance transformer applications worldwide.

The United States remains a significant consumer of electrical steel, supported by transformer modernization, electric vehicle manufacturing, and industrial automation. The U.S. operates more than 7,300 power generation facilities and over 600,000 miles of transmission lines, creating continuous demand for transformer-grade electrical steel. More than 15 million electric motors are installed annually across industrial facilities, while EV production exceeded 1.3 million units during 2025, increasing consumption of non-oriented electrical steel. Domestic utilities continue replacing aging transformers, with many units exceeding 40 years of service life. Energy efficiency regulations covering motors above 1 horsepower further strengthen demand for premium electrical steel grades across manufacturing sectors.

Key Findings

• Key Market Driver: Energy-efficient transformers and motors account for 68% of market demand.
• Major Market Restraint: Raw material price volatility impacts 49% of manufacturers.
• Emerging Trends: Thin-gauge electrical steel adoption has reached 46% globally.
• Regional Leadership: Asia-Pacific leads the market with 63% global share.
• Competitive Landscape: The top five companies control approximately 57% of production.
• Market Segmentation: Non-oriented electrical steel dominates with 61% market share.
• Recent Development: Advanced electrical steel improved magnetic efficiency by 12%.

Electrical Steel Market Latest Trends

The Electrical Steel Market is experiencing rapid technological advancement as manufacturers focus on improving magnetic performance while reducing core losses. Grain-oriented electrical steel with thicknesses of 0.23 mm and 0.27 mm is increasingly adopted in ultra-high-voltage transformers because these grades reduce no-load losses by nearly 10% compared with conventional materials. Non-oriented electrical steel continues to dominate electric motor manufacturing, representing approximately 61% of total consumption due to its isotropic magnetic properties.

Electric vehicle traction motors now operate at rotational speeds exceeding 18,000 rpm, encouraging the use of premium electrical steel with silicon content approaching 3.2%. Manufacturers are investing in laser scribing, advanced annealing, and precision coating technologies that improve magnetic flux density above 1.90 Tesla while lowering hysteresis losses. Automated rolling and inspection systems have improved production accuracy by approximately 20%, reducing defects in thin laminations. Sustainability is another significant trend, with recycled steel accounting for more than 35% of raw material usage in several manufacturing facilities. Smart grid expansion, replacement of aging transformers, and increasing deployment of renewable energy systems continue to strengthen demand for high-performance electrical steel across power generation, transmission, industrial machinery, and automotive applications.

Electrical Steel Market Dynamics

DRIVER

" Rising demand for energy-efficient transformers and electric vehicles."

The expansion of electricity infrastructure and electric mobility remains the strongest driver for the Electrical Steel Market. More than 95% of transformer cores are manufactured using grain-oriented electrical steel because of its superior magnetic permeability and lower core losses. Global electricity consumption exceeded 30,000 TWh, increasing investments in transmission and distribution equipment that requires premium electrical steel. Electric vehicle production surpassed 17 million units worldwide, and each traction motor uses high-grade non-oriented electrical steel to achieve efficiencies above 96%. Premium-efficiency industrial motors consume nearly 45% of industrial electricity, encouraging manufacturers to adopt advanced electrical steel laminations. Distribution transformers rated above 100 kVA increasingly utilize thin-gauge electrical steel measuring 0.23 mm and 0.27 mm to reduce energy losses.

RESTRAINT

" High production complexity and raw material price volatility."

The production of electrical steel requires specialized cold rolling, decarburization, annealing, and insulation coating processes, making manufacturing highly capital intensive. Silicon content generally ranges between 2.5% and 3.5%, requiring strict metallurgical control throughout production. More than 40% of manufacturers report that fluctuations in alloying material availability affect production planning. Manufacturing rejection rates for ultra-thin electrical steel can exceed 6% when dimensional tolerances are not maintained within precise limits. High-temperature annealing above 1,100°C increases energy consumption during production, while coating consistency directly influences insulation performance between laminations. Import dependency for premium grain-oriented electrical steel remains above 30% in several countries, extending procurement timelines.

OPPORTUNITY

" Expansion of smart grids and renewable energy infrastructure."

Smart grid modernization and renewable energy integration provide substantial opportunities for the Electrical Steel Market. More than 4,000 GW of renewable electricity capacity is currently installed worldwide, requiring thousands of new transformers and high-efficiency generators. Smart substations equipped with digital monitoring systems increasingly utilize advanced grain-oriented electrical steel to minimize transmission losses. Governments continue replacing aging power infrastructure, with many transformers operating beyond 35 years of service life. Offshore wind turbines exceeding 15 MW capacity require generators containing premium electrical steel capable of maintaining stable magnetic performance under continuous operation. Industrial automation has also expanded significantly, with automated production lines installing thousands of premium-efficiency motors annually.

CHALLENGE

" Limited production capacity for premium electrical steel grades."

Meeting rising demand for high-grade electrical steel remains challenging because only a limited number of manufacturers possess advanced production capabilities. Manufacturing grain-oriented electrical steel requires multiple rolling stages, precision heat treatment, and domain refinement technologies that may extend production cycles beyond 60 days. Premium electrical steel thicknesses of 0.23 mm require strict dimensional tolerances below 0.005 mm, increasing manufacturing complexity. More than 25% of transformer manufacturers experience extended delivery schedules during periods of high demand. Transportation and logistics constraints further affect international supply chains, particularly for oversized transformer laminations. Environmental regulations requiring lower industrial emissions also increase compliance costs for steel producers.

Electrical Steel Market Segmentation

BY TYPE

Oriented Electrical Steels: Oriented electrical steels account for approximately 39% of the Electrical Steel Market and are primarily used in power transformers, distribution transformers, and high-voltage transmission equipment. These steels are manufactured with grain alignment that delivers magnetic flux density exceeding 1.90 Tesla while minimizing hysteresis losses. Standard sheet thicknesses include 0.23 mm, 0.27 mm, and 0.30 mm, enabling lower no-load energy losses in transformer cores. More than 95% of transformer core manufacturing depends on grain-oriented electrical steel due to its superior magnetic characteristics. Growing investment in smart grids, renewable energy integration, and replacement of aging transformers continues to increase consumption. Utilities upgrading substations above 220 kV increasingly specify premium-oriented electrical steel grades with improved domain refinement and enhanced insulation coatings for greater operating efficiency.

Non-oriented Electrical Steels: Non-oriented electrical steels dominate the market with approximately 61% share because of their broad use in electric motors, generators, compressors, pumps, and electric vehicle traction systems. These steels provide nearly uniform magnetic properties in all directions, making them suitable for rotating electrical machinery. Premium non-oriented grades enable motor efficiencies above 96%, supporting compliance with modern energy-efficiency standards. Electric vehicle motors operating above 18,000 rpm increasingly utilize thin-gauge non-oriented electrical steel measuring 0.20 mm to 0.35 mm. Industrial automation, robotics, HVAC equipment, and renewable energy generators continue driving demand. Manufacturers are also introducing higher-silicon electrical steel containing approximately 3.2% silicon to reduce core losses while improving magnetic permeability and operational reliability.

BY APPLICATION

Household: The household segment represents approximately 24% of the Electrical Steel Market, supported by increasing production of refrigerators, washing machines, air conditioners, vacuum cleaners, and household pumps. More than 85% of modern household appliances incorporate electric motors manufactured using non-oriented electrical steel. High-efficiency compressor motors reduce electricity consumption by nearly 15% compared with conventional motor designs. Growing demand for inverter-based appliances further increases the adoption of premium electrical steel laminations with lower magnetic losses. Appliance manufacturers continue reducing motor size while maintaining efficiency above 90%, creating sustained demand for advanced electrical steel grades.

Industrial: The industrial segment holds the largest share at approximately 47% of the Electrical Steel Market. Industrial motors account for nearly 45% of global electricity consumption, making high-efficiency electrical steel essential for reducing operational energy losses. Manufacturing plants, mining operations, chemical facilities, water treatment stations, and power generation systems all rely on motors and generators built with premium electrical steel. Large industrial motors exceeding 500 kW increasingly use advanced non-oriented electrical steel to improve efficiency and reduce heat generation. Factory automation, robotics, and smart manufacturing continue supporting strong demand across industrial applications.

Automotive: The automotive segment contributes approximately 29% of the Electrical Steel Market, driven primarily by electric and hybrid vehicle production. A typical electric vehicle traction motor contains several tens of kilograms of non-oriented electrical steel designed for high rotational speeds and superior magnetic performance. Global electric vehicle production exceeded 17 million units, significantly increasing demand for premium motor-grade electrical steel. Advanced electrical steel helps improve motor efficiency above 96%, extending vehicle driving range while reducing energy consumption. Growing adoption of electric buses, commercial vehicles, and hybrid passenger cars continues accelerating consumption of high-performance electrical steel throughout the automotive sector.

Electrical Steel Market Regional Outlook

North America

North America accounts for approximately 13% of the global Electrical Steel Market, supported by extensive investments in electrical infrastructure and industrial modernization. The United States represents more than 82% of regional demand due to its large transformer manufacturing industry and expanding electric vehicle production. The region operates over 600,000 miles of transmission lines and thousands of substations requiring electrical steel for transformer cores. More than 15 million industrial electric motors are installed annually across manufacturing, mining, and utility sectors. High-efficiency motor regulations have accelerated the adoption of premium non-oriented electrical steel with efficiencies exceeding 96%.

Grain-oriented electrical steel continues to dominate transformer manufacturing, particularly for distribution transformers rated above 100 kVA. Renewable energy installations, including wind farms and utility-scale solar projects, have significantly increased demand for high-performance transformers and generators. Canada continues investing in hydroelectric power and smart grid expansion, while Mexico is increasing industrial automation and automotive manufacturing. The replacement of aging transformers, many operating beyond 40 years, remains a major contributor to regional demand. Utilities are increasingly selecting thin-gauge electrical steel measuring 0.23 mm and 0.27 mm to reduce transmission losses and improve grid reliability.

Europe

Europe holds approximately 17% of the Electrical Steel Market, supported by advanced manufacturing capabilities, strict environmental regulations, and widespread electrification initiatives. Germany, France, Italy, and Poland remain among the largest consumers of electrical steel for transformer and electric motor production. More than 55% of newly manufactured passenger vehicles in several European countries include hybrid or fully electric powertrain technologies, increasing demand for premium non-oriented electrical steel. Energy-efficiency regulations continue encouraging manufacturers to produce motors exceeding 95% efficiency for industrial applications. Wind energy plays a significant role, with offshore turbines above 15 MW requiring generators manufactured using advanced electrical steel laminations.

Asia-Pacific

Asia-Pacific dominates the Electrical Steel Market with approximately 63% of global market share, making it the world's largest production and consumption region. China, Japan, South Korea, and India collectively account for the majority of electrical steel manufacturing capacity. China alone produces millions of metric tons of electrical steel annually and remains the largest supplier of transformer-grade materials. Japan and South Korea lead in manufacturing premium grain-oriented electrical steel with magnetic flux density exceeding 1.90 Tesla.

India continues expanding transmission infrastructure, adding thousands of circuit kilometers of transmission lines and numerous high-capacity substations every year. Electric vehicle production continues rising across China, Japan, and South Korea, significantly increasing consumption of high-grade non-oriented electrical steel. Industrial automation, consumer appliance manufacturing, and renewable energy development further strengthen regional demand. Asia-Pacific also benefits from integrated steel production facilities, advanced rolling mills, and lower manufacturing costs, enabling competitive exports to global transformer and motor manufacturers. Increasing investments in smart grids, ultra-high-voltage transmission systems, and industrial electrification ensure sustained demand for premium electrical steel products throughout the region.

Middle East & Africa

The Middle East & Africa accounts for approximately 7% of the global Electrical Steel Market, supported by expanding electricity infrastructure, industrial diversification, and renewable energy investments. Gulf countries continue constructing high-capacity substations and transmission networks to support growing electricity demand and urban development. Saudi Arabia and the United Arab Emirates are investing in large-scale renewable energy projects requiring advanced transformers and generators manufactured with premium electrical steel.

South Africa remains an important regional market due to ongoing modernization of power generation and industrial facilities. More than 60% of regional electrical infrastructure projects involve transformer installations that require grain-oriented electrical steel with low core-loss characteristics. Industrial sectors including mining, oil and gas, and manufacturing increasingly adopt high-efficiency electric motors utilizing non-oriented electrical steel. Government programs promoting local manufacturing and energy efficiency continue supporting market expansion. Investments in smart cities, railway electrification, and utility-scale solar power plants further stimulate demand for high-performance electrical steel. Although regional manufacturing capacity remains smaller than Asia-Pacific and Europe, increasing infrastructure spending and industrial development continue creating stable long-term opportunities for electrical steel producers.

List of Top Electrical Steel Companies

• China Baowu Steel Group
• Shougang Group
• Ansteel Group
• Nippon Steel Corporation
• POSCO
• JFE Steel
• OJSC Novolipetsk Steel
• ArcelorMittal
• Thyssenkrupp AG
• Stalprodukt S.A.
• Cogent (Tata Steel)
• AK Steel Corporation
• Allegheny Technologies Incorporated
• Aperam South America
• Unilam Pressings
• TPS

Top Two Companies Market Share

• China Baowu Steel Group – Holds approximately 18% of the global Electrical Steel Market
• Nippon Steel Corporation – Accounts for approximately 14% of the global Electrical Steel Market

Investment Analysis and Opportunities

The Electrical Steel Market continues attracting significant investment due to increasing electricity demand, rapid electrification, and the expansion of electric vehicle manufacturing. More than 70% of newly commissioned power transformers utilize premium grain-oriented electrical steel, encouraging manufacturers to expand production capacity. Several steel producers are installing new cold rolling mills capable of processing sheets as thin as 0.20 mm, improving product quality for advanced motors and transformers. Investments in automated inspection systems have increased production accuracy by approximately 20%, reducing manufacturing defects and improving yield rates.

Electric vehicle production exceeding 17 million units annually continues creating strong demand for premium non-oriented electrical steel. Renewable energy projects, including offshore wind turbines above 15 MW, require high-efficiency generators manufactured with advanced electrical steel laminations. Smart grid modernization, railway electrification, and industrial automation projects across Asia-Pacific, North America, and Europe provide long-term investment opportunities. Growing adoption of recyclable steel, which now exceeds 35% of raw material usage in several production facilities, also supports sustainable manufacturing investments. Companies investing in laser scribing, advanced annealing, and precision coating technologies are expected to strengthen their competitive position as demand for low-core-loss electrical steel continues to increase.

New Product Development

Manufacturers in the Electrical Steel Market are focusing on developing thinner, stronger, and lower-loss electrical steel grades for transformers, electric motors, and electric vehicles. Premium grain-oriented electrical steel with a thickness of 0.23 mm has been introduced to reduce transformer core losses by nearly 10% compared with conventional grades. Non-oriented electrical steel containing approximately 3.2% silicon is increasingly used in high-speed electric vehicle motors operating above 18,000 rpm. Advanced insulation coatings improve lamination durability while reducing eddy current losses by approximately 8%. Several manufacturers have introduced laser-domain-refined electrical steel capable of delivering magnetic flux density above 1.90 Tesla, improving transformer efficiency.

Automated rolling technology has enhanced thickness precision to within 0.005 mm, ensuring better consistency in premium products. Development of recyclable electrical steel with recycled content exceeding 35% supports sustainability objectives while maintaining high magnetic performance. Companies are also integrating artificial intelligence into production lines, improving quality inspection accuracy by approximately 25%. These innovations continue supporting demand from renewable energy, industrial automation, electric mobility, and smart grid infrastructure.

Five Recent Developments (2023-2025)

• 2025: China Baowu Steel Group expanded high-grade electrical steel production capacity with new intelligent processing lines capable of manufacturing 0.20 mm ultra-thin electrical steel for EV motors and premium transformers.
• 2025: Nippon Steel Corporation introduced a next-generation grain-oriented electrical steel with approximately 10% lower core loss and magnetic flux density above 1.90 Tesla for ultra-high-voltage transformers.
• 2024: POSCO expanded production of non-oriented electrical steel designed for high-speed electric vehicle motors exceeding 18,000 rpm, improving motor efficiency beyond 96%.
• 2024: JFE Steel enhanced its electrical steel manufacturing process by implementing advanced laser scribing technology, increasing magnetic performance by approximately 8% while reducing transformer energy losses.
• 2023: Thyssenkrupp AG strengthened sustainable electrical steel production by increasing recycled steel utilization beyond 35% and improving manufacturing efficiency through digital process control systems.

Report Coverage of Electrical Steel Market

The Electrical Steel Market report provides an extensive assessment of industry performance, production technologies, application trends, competitive landscape, and regional developments. The report evaluates grain-oriented and non-oriented electrical steel across household, industrial, and automotive applications while presenting market share analysis supported by verified industry statistics. It examines transformer manufacturing, electric vehicle production, industrial motor installations, renewable energy expansion, and smart grid modernization using important numerical indicators such as production capacity, magnetic flux density, steel thickness, efficiency levels, and application shares.

The report includes detailed regional analysis covering North America, Europe, Asia-Pacific, and the Middle East & Africa, highlighting their respective market shares, manufacturing strengths, and infrastructure developments. It also profiles leading manufacturers, compares technological advancements, analyzes investment opportunities, reviews product innovations introduced during 2023–2025, and evaluates emerging trends influencing future demand. Additionally, the report studies supply chain developments, sustainability initiatives, recycling practices exceeding 35% in several facilities, and evolving regulatory standards affecting electrical steel manufacturing, providing stakeholders with comprehensive insights for strategic planning and informed business decisions.