Electrical Steel Market

Electrical Steel Market Size, Market Forecast and Outlook By FMI

Electrical steel market value is expected to increase from USD 47.8 billion in 2025 to USD 88.9 billion by 2035. Market expansion is anticipated to register a 6.3% CAGR during 2025 to 2035 across major power and mobility uses. Transformers are likely to lead with 43% share in 2025 and household appliances are projected to account for 18% of total demand.

Summary of the Electrical Steel Market

• Demand and Growth Drivers
  • Grid modernization is expected to lift transformer demand as utilities replace older assets with lower-loss magnetic cores.
  • EV production is anticipated to increase use of non-grain oriented steel in traction motors and high-frequency components.
  • Renewable power investment is likely to raise demand for efficient generator cores across wind and solar infrastructure.
• Product and Segment View
  • Grain-oriented electrical steel is expected to attract steady buying from transformer makers serving transmission networks and substations.
  • Non-grain oriented electrical steel is anticipated to gain stronger use in EV motors and household appliance systems.
  • Transformers are likely to lead application demand as grid operators prioritize lower power losses and system reliability.
• Geography and Competitive Outlook
  • China is expected to post the fastest country-level CAGR as EV output and grid upgrades increase material use.
  • Asia Pacific is likely to draw higher supplier attention through large steelmaking capacity and equipment manufacturing demand.
  • Producers with stronger coating technology and thin-gauge processing are anticipated to improve their standing in high-efficiency grades.
• Analyst Opinion
  • Nikhil Kaitwade of FMI suggests, “Electrical steel demand is expected to broaden as utilities and vehicle makers pursue lower energy losses in core systems. Producers able to deliver consistent magnetic performance and tighter coating quality are likely to gain preference across transformer and EV motor supply programs.”
• Electrical Steel Market Value Analysis
  • Electrical steel demand is expected to concentrate around lower-loss materials used in transformers and motors.
  • Utilities are likely to spend on high-efficiency transformer cores as grid upgrades require reliable magnetic materials.
  • EV manufacturers are anticipated to increase buying of non-grain oriented grades for traction motor efficiency.
  • Supplier investment is expected to focus on thin-gauge processing and coating upgrades for higher-efficiency applications.

Key Takeaways, Market Size, and Forecast

• Electrical steel market is expected to reach USD 47.8 billion in 2025 under steady transformer and motor demand.
• By 2035, electrical steel sales are projected to reach USD 88.9 billion across power and mobility applications.
• From 2025 to 2035, market value is anticipated to expand at a 6.3% CAGR globally.
• Transformers are likely to account for 43% share of the application segment in 2025 globally.
• Household appliances are expected to capture 18% share of total demand in 2025 across energy-efficient equipment.
• China is projected to record the fastest country-level expansion at 7.4% CAGR through 2035 among listed countries.

Analyzing Electrical Steel Market by Top Investment Segments

Transformers are expected to dominate application demand due to the critical role of electrical steel in energy-efficient magnetic cores

The transformer segment to hold approximately 43% of the global electrical steel market share in 2025 and is expected to grow at a CAGR of 6.6% through 2035. Electrical steel is a key material in the cores of power and distribution transformers, where it enhances magnetic flux density while minimizing core losses.

With rising demand for grid reliability, renewable energy integration, and rural electrification, transformer manufacturing is increasing across Asia-Pacific, the Middle East, and Latin America. Non-grain-oriented and grain-oriented electrical steels are being engineered for lower hysteresis loss, improved permeability, and reduced eddy currents. Investments in smart grids, substation upgrades, and cross-border transmission infrastructure continue to reinforce transformer-related demand for advanced electrical steel grades.

Household appliances are expected to be a key end-use segment, supported by rising appliance penetration and energy-efficiency standards

The household appliances segment is estimated to account for approximately 18% of the global electrical steel market share in 2025 and is expected to grow at a CAGR of 5.8% through 2035. Electrical steel is widely used in the motors and cores of washing machines, refrigerators, air conditioners, and induction cooktops. The material's magnetic properties help reduce energy consumption and improve device performance.

With increasing demand for inverter-based and energy-labeled appliances, especially across emerging economies, the role of electrical steel in ensuring quieter, longer-lasting, and more efficient appliances is expanding. Manufacturers are also focusing on reducing thickness and optimizing silicon content in electrical steel to meet evolving standards under programs such as ENERGY STAR and BEE (India). As electrification in residential sectors grows, household appliances will continue to be a reliable downstream market for electrical steel.

Trend Analysis and Purchasing Criteria across Different End-Use Segments

The industry addresses high technical standards and performance requirements, especially in energy and automotive applications. Both raw material suppliers and manufacturers prioritize material efficiency, magnetic performance, and reliability in supply since these dimensions have a direct bearing on conductivity and transformer or core performance (red). Meanwhile, manufacturers focus on production costs and compliance with regulations, which is a balancing act between technological standards as well as environmental and safety standards.

With regard to production costs and industry demand, retailers/distributors rely on this for inventory turnover and competitive pricing. As such, end-use industries, such as automotive and energy, show the following preferences concerning magnetic performance, material efficiency, and related regulations: these directly tie into energy savings and system longevity overall.

Risk Assessment for the Electrical Steel Market

Various risks within the industry impact its stability and growth. The most common among these risks is that of industry risk, particularly because of global demand swings. Industry mainly depends on factors like automobiles (electric vehicles mostly), energy (transformers and motors), and construction. Weaknesses in these areas, irrespective of the cause, such as economic recession, geopolitical instability, or energy policy change, lessen the demand for product.

The market is also subject to price fluctuations of raw materials, specifically iron ore and coking coal; this directly influences manufacturing costs and profit margins, especially amongst less price-powerful companies. Operational risks arise from the necessary capital intensity and technical complexity associated with product production. The entire production process, particularly that of grain-oriented (GO) electrical steel as well as non-grain-oriented (NGO) electrical steel, demands stringent control coupled with quality assurance.

Any disruption in the manufacturing processes on account of equipment failure or supply chain bottlenecks, as well as a shortage of labor, might cause a delay in delivery, increased costs, or loss of customer loyalty. Moreover, the technological expertise needed to keep up with the latest efficiency and magnetic property standards stiffens pressure on relatively smaller or novice entrants into this industry.

There are high regulatory and trade risks as well. The steel industry is usually one of the most tariffed, duty-imposed, and anti-dumping sectors, which affects its trade flow and leads to increased costs for importers and exporters. For example, the USA tariffs on steel imports have changed the prices and availability of product used in transformers, which is concerning utility companies. Also, environmental regulations regarding carbon emissions, waste disposal, and energy use are becoming stiffer. Heavy modifications in production facilities or changes in materials used would incur high costs.

On account of the environment and sustainability, markets will feel greater pressure on the ecological footprint of steel production during this time. Steel manufacture is extremely energy-intensive and is, therefore, a significant contributor to greenhouse gas emissions.

As ESG (Environmental, Social and Governance) factors are increasingly becoming important to investors and regulators alike, the adoption of greener technology is what companies will have to show, as will responsibly sourcing and recycling practices. Nonconformity towards sustainability expectations would mean reputational damage or loss of key investment funds.

Country-Wise Analysis (2025 to 2035 Forecast)

Countries	CAGR (2025 to 2035)
USA	6.3%
UK	5.8%
France	5.5%
Germany	6.1%
Italy	5.2%
South Korea	6.7%
Japan	5.9%
China	7.4%
Australia	5.3%
New Zealand	4.9%

USA

The USA electric steel industry will grow at a CAGR of 6.3% during 2025 to 2035, with growing investments in renewable energy infrastructure and powering the grid with modernization. Increasing demand for efficient motors and electric transformers is compelling domestic consumption vigorously. Moreover, policy efforts to popularize electric vehicles (EVs) and hybrid systems are also fuelling the industry further.

Dominant producers like AK Steel, Cleveland-Cliffs Inc., and United States Steel Corporation are top industry players that are aggressively expanding their capacity. Increased usage of electric powertrains in vehicle applications is also fueling demand for non-grain-oriented electrical steel. In contrast, the grain-oriented ones continue to play a critical role in applications involving power transmission and distribution.

UK

The UK industry is expected to grow with a CAGR of 5.8% through the forecast period, which is largely driven by the demand for cleaner forms of energy consumption and electric transport. The focus on minimizing carbon emissions has led to a relentless demand for energy-saving electrical parts in industrial as well as commercial applications.

Major industry players like Tata Steel, UK, and Liberty Steel are concentrating on cutting-edge production techniques and strategic collaborations to meet increasing domestic needs. Wind turbine installation and EV charging stations are driving demand for products globally, particularly transformers and inductors that energize renewable energy grids.

France

France's industry is anticipated to expand at a 5.5% CAGR during 2025 to 2035. The country's energy policy of decarbonization and sustainable nuclear power is propelling demand for product. Increased investment in smart grid technology and electric mobility are also fueling industry forces ahead.

Companies like ArcelorMittal and Aperam are industry leaders in industry growth through innovation and capacity expansion. The product is increasingly being used in applications like power transformers and high-performance motors for domestic upgrading and the growing EV base.

Germany

Germany is expected to experience a CAGR of 6.1% in the industry between 2025 and 2035. The strong automotive industry, combined with the high level of focus on energy conversion and industrial electrification, is driving up the use of high-quality magnetic materials. Energy-efficient motor cores and renewable energy infrastructure are some of the industry drivers for consumption.

Industry players such as Voestalpine and Thyssenkrupp are increasing R&D activities to produce high-quality products that can meet changing technological demands. Use in EV production, wind energy equipment, and power transformers is driving robust industry growth.

Italy

Italy's industry is likely to expand at a CAGR of 5.2% over the forecast period, with industrial automation trends and increasing grid modernization initiatives. Expansion of the national electrification agenda, particularly in public transport and renewable energy generation, is fueling material demand.

Industry leaders like Marcegaglia and Acciaieried'Italia are leading by integrating production activities and diversifying product lines. Increased emphasis on grain-oriented electrical steel for transformer cores and non-grain-oriented electrical steel for electric motors will enhance industry stability.

South Korea

The South Korean industry is expected to register a 6.7% CAGR between 2025 and 2035, fueled by the electronics and the automotive industry's technological superiority. The spread of EVs and the growth of smart grids are considerably propelling the use of high-performance products.

Major players such as POSCO and Hyundai Steel are using innovation and sustainability to increase capacity. Increasing local demand from domestic customers and foreign buyers for high-grade electrical machinery and automotive uses is stimulating the production of higher grades of grain and non-grain-oriented steel.

Japan

Japan's industry is anticipated to expand at a CAGR of 5.9% during the forecast period, supported by robust demand from the industrial machinery and automotive sectors. Initiatives to minimize energy losses and maximize equipment efficiency are influencing the selection of materials for applications in motors and generators.

Players like Nippon Steel Corporation and JFE Steel are emphasizing precision manufacturing to meet strict performance standards. The rising use of products in high-frequency motors of EVs and robotics is propelling industry growth in domestic and export markets.

China

China will also lead the industry, with a growth rate of 7.4% during the forecast period. Key growth drivers include long-term industrialization, mass-scale adoption of EVs, and comprehensive replacement of national power infrastructure. Government policies on emissions reduction through carbon neutrality and energy efficiency are also driving demand.

Large producers such as Shougang Group and Baowu Steel Group are expanding capacity and investing in advanced processing technologies. Uses in segments such as grid enhancement, electric mobility, and energy-efficient appliances are propelling a diversified and healthy industry.

Australia

The Australian industry will expand at a CAGR of 5.3% from 2025 to 2035, with constant innovation in renewable energy schemes and rising electrification of rural and remote regions. There is a rising need for efficient transformers and motors, and initiatives are being made to modernize infrastructure.

Imports and partnerships with global suppliers are enabling industry growth. Key stakeholders are observing the use of products in applications that are synergistic with the nation's net-zero objectives, especially in solar and wind infrastructure and clean transportation networks.

New Zealand

New Zealand is projected to grow at a CAGR of 4.9% through the forecast period in the industry. Strategic energy reforms and decarbonization policies for the transport segment are adding demand. Demand for efficient transformer and motor systems is picking up pace with utilities and manufacturing sectors.

Imports and collaborations are meeting local markets with international suppliers, whereas domestic production sites are constrained. Uses in power grid refurbishment, electric vehicle charging infrastructure, and green building technology are driving future industry potential for products.

Competitive Outlook

The electrical steel market is highly consolidated, with major players like Nippon Steel, POSCO, and ArcelorMittal dominating production capacities. These companies are investing heavily in R&D to develop advanced electrical steel grades that meet evolving industry requirements. For instance, Nippon Steel’s March 2025 launch of Ultra-Loss-Core GOES targets high-voltage transformer applications, offering a 12% reduction in energy loss compared to conventional grades. POSCO expanded its NGOES production in February 2025 to cater to the booming EV motor market in South Korea and beyond.

• ThyssenKrupp and Voestalpine are focusing on sustainability, with initiatives to reduce carbon emissions in electrical steel manufacturing. ArcelorMittal’s new annealing line in Belgium, operational since Q4 2024, enhances production efficiency for high-grade NGOES. Meanwhile, regional players like Baosteel and Tata Steel are strengthening their foothold in Asia-Pacific and India, respectively, capitalizing on local demand for energy and automotive applications
• JFE Steel’s collaboration with a leading European automaker to supply ultra-thin NGOES for next-gen EV motors. Cleveland-Cliffs acquired a niche electrical steel producer in early 2025 to expand its portfolio in renewable energy applications

Companies

• Nippon Steel Corporation
• POSCO
• ThyssenKrupp AG
• ArcelorMittal
• Voestalpine AG
• Baosteel Group
• JFE Steel Corporation
• Cleveland-Cliffs Inc.
• Tata Steel Limited

Segmentation

By Product Type:

The industry is segmented into grain-oriented electrical steel and non-grain oriented electrical steel.

By Application:

The industry is categorized into inductors, motors, and transformers.

By End Use:

The industry is segmented into automobile, manufacturing, energy, household appliance, and others.

By Region:

The industry is divided into North America, Latin America, Europe, Asia Pacific, and Middle East and Africa.