Electrical Steel Market Size & Outlook, 2025-2033

Electrical Steel Market Overview

The global electrical steel market size was valued at USD 41.84 billion in 2024 and is projected to grow from USD 45.1 billion in 2025 to reach USD 75.53 billion by 2033, growing at a CAGR of 6.5% during the forecast period (2025–2033). The growth of the market is attributed to the rising demand for electric motors, transformers, and hybrid/electric vehicles, along with the increasing use of electrical steel in the power and automotive industries.

Key Market Indicators

• Asia-Pacific region dominated the global electrical steel market with the largest revenue share in 2024.
• By type, the grain-oriented electrical steel segment held a significant share in the market.
• By application, the motors segment was the largest contributor.
• By end-user, the energy & power sector was dominant.
• Europe is expected to witness the fastest growth during the forecast period, supported by the expanding EV and automotive sector.

Market Size & Forecast

• 2024 Market Size: USD 41.84 Billion
• 2033 Projected Market Size: USD 75.53 Billion
• CAGR (2025–2033): 6.5%
• Asia-Pacific: Largest market in 2024
• Europe: Fastest-growing region

An iron alloy molded to produce particular magnetic properties is called electrical steel, also referred to as laminate steel or silicon steel. Due to its high permeability, which supports low core loss in electrical components, electrical steel is primarily used to produce cores for power transformers, generators, and inductors, among other electrical components. Small relays, solenoids, electric motors, generators, and many other electromagnetic devices all make use of electrical steel, a soft magnetic material with excellent electrical properties. Silicon steel, transformer steel, and lamination steel are other names for electrical steel. It is primarily utilized in the automotive and electric power distribution industries. Additionally, electrical steel is an iron-based ferromagnetic material that contains silicon (Si) in concentrations ranging from 1% to 6.5%. Electric devices that needed steel that could reduce heat dissipation, a problem that leads to electricity waste, led to the advancement of electrical steel.

Although iron was found to be the most cost-effective option, its impurities aren't ideal. It was found that silicon improves permeability, decreases hysteresis loss, and increases resistivity. The most popular type of commercially available electric steel contains about 3.25% silicon because steel with a higher silicon content tends to be too brittle to be cold rolled. However, the most advanced magnetic and electric properties are found in electrical steel with 6.5% Si, but to overcome its brittleness and constrained ductility, different thermomechanical processes are needed.

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Market Growth Factors

Rising Electric Motor Demand to Speed up Market Growth

The increasing demand for electric motors across various residential, commercial, and industrial sectors is one of the main factors fueling market expansion. Electrical steel is frequently used in creating power generators with improved electromagnetic properties and low carbon dioxide emissions, as well as motors with increased magnetic flux and torque. Additionally, the growing use of hybrid and electric vehicles (H/EVs) is accelerating market growth. Vehicle parts made of electric steel are lighter while also improving the appearance and safety of the vehicle. Accordingly, the increasing demand for electrical steel for low-energy loss long-distance power transmission and infrastructure construction operations is also fueling the market growth.

High Rate of Electrical Steel Consumption in Transformers and Motors

One of the main factors propelling the expansion of the global market for electrical steel is the rise in automobile production on a global scale. Year over year, the production is increasing. Using electrical steel in automobiles improves fuel efficiency, stimulating demand for electrical steel in the automotive sector. During the forecast period, the market for electrical steel is anticipated to grow even more due to the rising demand for electric and hybrid vehicles. A recent development in the market is the conservation of energy. The main factors boosting the demand for transformers and propelling the market are increased industrial development and rising electricity consumption. Due to its strong magnetic permeability, electrical steel is primarily utilized in the power industry.

Market Restraint

Fluctuating Costs for Raw Materials

The steel industry primarily depends on the supply of raw materials for processing steel products and production. Iron ore, coal, industrial gases, and ferroalloys are the raw materials needed to produce steel. Steel production and processing operations can run smoothly if reasonably priced raw materials are. The cost of raw materials is, however, very erratic. Prices of finished steel products, such as non-grain-oriented electrical steel and grain-oriented electrical steel, rise due to rising steel production costs due to rising raw material costs.

Market Opportunity

Upcoming Rules, Government Assistance, and Regulations

Compared to the US and Western European nations, the laws and regulations in emerging economies like India, China, and Brazil are less strict. These nations' automotive industries are not only huge but also expanding rapidly. With the regulations in place, these nations will be essential destinations for market participants in electrical steel. Governmental organizations place a strong emphasis on lowering vehicle carbon emissions. In addition to supporting the use of electrical steel for electric vehicles, heavy construction machinery, and passenger vehicles, they are conducting research and development (R&D) on new materials.

Regional Analysis

Asia Pacific's Market Trends

Asia Pacific is the most significant shareholder in the global market and is expected to grow at a CAGR of 5.8% during the forecast period. China, India, Japan, Australia, and the rest of Asia-Pacific are all included in the analysis of the Asia-Pacific market. India ranks third in the world for both the production and consumption of electricity. Additionally, investments worth USD 179.31 billion are anticipated to flow into the Indian power sector. More than 44% of South Asia and Pacific revenue would come from India. India's energy sector development is anticipated to be aided by government plans to provide quality and affordable energy generating and distribution networks across the nation for rural and urban electrification. This development has been facilitated by the presence of international steel producers in the area, including ArcelorMittal, Nippon Steel & Sumitomo Metal Corporation, Tata Steel, and POSCO Steel. These businesses also benefit from the region's inexpensive raw materials and labor. The rapidly expanding population and urbanization are additional factors anticipated to fuel market expansion.

European Market Trends

Europe is expected to grow at a CAGR of 6.8% during the forecast period. The UK, Germany, France, Italy, Spain, and the rest of Europe are all included in the analysis of Europe's market. Because of the expanding auto industry in the area and the developing electric vehicle market sector. The automotive industry is rapidly establishing cost and fuel efficiency, recyclability, and formability as key focus areas, making material and component selection more crucial than ever. Facts provided by Tata Steel, a division of the Tata Group, indicate that the demand for advanced electrical and plated steel in the European automotive industry will increase by 2.6 million tons by 2050 due to the projected rise in demand for ultra-low emission or electric vehicles. The demand for this product is anticipated to rise due to the expansion of the automotive and manufacturing industries in the European region. Due to its leading automakers, Germany controls the domestic automotive market in Europe.

Type Analysis

Based on type, the global electrical steel market is bifurcated into grain-oriented, non-grain-oriented, and others. The grain-oriented electrical steel segment is the highest contributor to the electrical steel market and is expected to grow at a CAGR of 6.3% during the forecast period. Electrical Transformers are expanding due to several factors, including upgrading current grid networks, initiatives for developing the smart grid, and increasing demand for these electrical Transformers. During the forecast period, the adoption of grain-oriented electrical steel will be aided by the sharp rise in demand for electrical transformers. Grain-oriented electrical steel typically contains 3% silicon. It is made of low-carbon steel, and to get the best results, it is generated in the rolling direction under strict control of the crystal orientation of the sheet. Applications for grain-oriented electrical steel include large power transformers, distribution transformers, compact transformers, current transformers, shunt reactors, wound cores, and power generators.

Application Insights

Based on application, the global electrical steel market is bifurcated into inductors, transformers, motors, rotors, stators, and others. The motors segment is the highest contributor to the electrical steel market and is expected to grow at a CAGR of 6.48% during the forecast period. The motor segment has experienced robust volume growth in recent years. It was projected. As the use of electric vehicles spreads across more developed and developing countries worldwide, the demand for electric motors will rise. Growing public awareness of the advantages of using electrical steel generates demand, opening doors for material producers. Rotating machines in the manufacturing sector transform electrical energy into mechanical energy for industrial work. The current and potential demand motor will be intensified by following statistical information.

End-Users Insights

Based on end users, the global electrical steel market is bifurcated into household appliances, manufacturing, energy & power, automotive, and others. The energy & power segment is the highest contributor to the electrical steel market and is expected to grow at a CAGR of 6.07% during the forecast period. This may be a result of the expanding world economy, which is directly related to the expansion of the power industry. The energy category is expected to produce a maximum revenue share of more than 33% in 2022 due to the rising number of applications and the frequent use of transformers, motors, and generators for uninterrupted energy consumption. In nations like the United States, the United Kingdom, and others, improvements in energy sector techniques have led to better cost-effectiveness for energy efficiency in transformers and generators.

List of key players in Electrical Steel Market

1. Cogent Power
2. Nippon Steel & Sumitomo Metal Corporation
3. POSCO, Baosteel
4. China Baowu Steel Group Corporation Limited
5. Ansteel Group Corporation Limited
6. United States Steel Corporation
7. ArcelorMittal
8. Tata Steel Limited
9. SAIL (Steel Authority of India Limited)
10. Voestalpine Group
11. Baosteel Group (Baowu Steel Group Corporation Limited)
12. Jindal Steel and Power Limited
13. JFE Steel Corporation
14. Essar Steel

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Recent Developments

• August 2025 - JFE Steel and JSW Steel announced a significant R&D and investment plan to expand their joint venture's electrical steel manufacturing capacity in India. The companies will invest ₹58.45 billion to expand production of grain-oriented electrical steel at two plants in India.
• August 2025 - POSCO, in partnership with JSW Steel, announced a plan to build a new 6 million-ton per annum integrated steel plant in India. While this is a broad M&A and investment activity, it marks a significant move to expand POSCO's global footprint and is expected to include advanced steel production, including electrical steel for the burgeoning Indian market.
• July 2025 - Thyssenkrupp Steel launched new high-tech facilities at its Duisburg location following an €800 million investment. This R&D and infrastructure development project aims to optimize its production network and expand its product portfolio, particularly in the case of high-strength steels and grades for electric mobility and the energy sector.
• June 2025 - Nippon Steel and U.S. Steel announced the finalization of their merger agreement, valued at $14.9 billion. This M&A activity, which includes an $11 billion new investment by Nippon Steel, is aimed at creating a global steel powerhouse with extensive capabilities, including in advanced steels for electric vehicles and renewable energy.