The global electrical steel market size was valued at USD 44.56 billion in 2025 and is projected to grow from USD 47.46 billion in 2026 to USD 78.54 billion by 2034, registering a CAGR of 6.5% during the forecast period from 2026 to 2034. Asia Pacific dominated the electrical steel market with a market share of 46.8% in 2025.
The electrical steel market comprises the production, distribution, and application of specialised steel alloys engineered to deliver high magnetic permeability and low core losses in electromagnetic equipment. Electrical steel is widely used in transformers, electric motors, generators, inductors, and power transmission systems. Market growth is driven by increasing electricity demand, grid modernisation, renewable energy integration, electric vehicle adoption, and advancements in energy-efficient electrical infrastructure.
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Growing Demand for High-Performance Electrical Steel in Electric Motors
Electrical steel is increasingly being optimized for electric motors as electrification expands across vehicles, industrial equipment and energy-efficient appliances. Non-grain-oriented grades with lower core losses can improve motor efficiency and support higher power density, making thin-gauge and advanced magnetic grades increasingly important for electric mobility and industrial electrification. This is shifting demand toward electrical steel with tighter magnetic-performance specifications.
Increasing Shift Toward Higher-Efficiency Electrical Steel for Grid Equipment
Electrical steel used in transformer cores is increasingly being specified for lower core losses and higher magnetic permeability as utilities modernize transmission and distribution networks. Grain-oriented electrical steel is particularly important because its magnetic properties support more efficient transformer operation, making premium grades increasingly relevant as electricity demand and renewable-power integration increase.
Expansion of Grid Modernization Supports Electrical Steel Demand
Investment in transmission and distribution infrastructure is increasing demand for transformers and other electrical equipment that rely on electrical steel cores.
Limited Availability of Specialized Grades Can Constrain Electrical Steel Supply
Advanced electrical steel requires tightly controlled composition, rolling, annealing, coating and magnetic-property processes, limiting the number of facilities capable of producing premium grades at scale. This creates supply constraints for transformer manufacturers and other users when demand increases rapidly. Long qualification cycles can further restrict the ability of downstream manufacturers to switch suppliers quickly.
Expansion of Renewable Energy Infrastructure Creates Demand for Advanced Transformer Steel
Advanced grades that reduce transformer core losses can help improve the efficiency of networks handling increasingly variable and geographically distributed power generation. This creates opportunities for suppliers of high-permeability and domain-refined electrical steel.
Balancing Lower Core Losses With Manufacturing Complexity Creates Technical Challenges
Thin-gauge and high-permeability grades can require more demanding processing and tighter quality control, increasing manufacturing complexity and production costs.
Non-Grain Oriented Electrical Steel Dominated the Market with 64.2% Share in 2025
The non-grain oriented electrical steel segment accounted for the largest share of the global electrical steel market at 64.2% in 2025, driven by its extensive use in electric motors, generators, household appliances, and electric vehicles. Its superior magnetic properties and growing demand across industrial and automotive applications continue to support segment growth.
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Motors are Projected to Register the Fastest Growth at a CAGR of 8.1%
The motors segment is expected to expand at the highest CAGR of 8.1% during 2026–2034, supported by the rising adoption of electric vehicles, increasing industrial automation, expanding manufacturing activities, and growing demand for energy-efficient motor systems across various industries.
Energy & Power Dominated the Market with 31.4% Share in 2025
The energy & power segment accounted for the largest share of the global electrical steel market at 31.4% in 2025, driven by increasing investments in power generation, transmission, and distribution infrastructure. Growing deployment of transformers, grid modernisation projects, and the integration of renewable energy sources continue to strengthen demand for electrical steel in this sector.
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Asia Pacific dominated the electrical steel market with a 46.8% share, valued at USD 20.85 billion in 2025. The region's leadership is driven by rapid industrialisation, expanding power generation and transmission infrastructure, growing electric vehicle (EV) production, and increasing investments in renewable energy projects. Strong manufacturing capabilities, rising electricity demand, and government initiatives supporting energy-efficient technologies continue to drive regional market growth.
China accounted for the largest share of the Asia Pacific market in 2025. Growth is supported by large-scale investments in power grid expansion, increasing production of electric vehicles and industrial equipment, strong domestic manufacturing capacity, and rising demand for energy-efficient transformers and motors.
Japan is witnessing steady market growth due to its advanced manufacturing sector, increasing adoption of high-grade electrical steel in electric motors and transformers, continuous investments in energy-efficient technologies, and growing demand from the automotive and electronics industries.
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North America accounted for 20.4% of the global electrical steel market, reaching USD 9.09 billion in 2025. Market growth is driven by increasing investments in grid modernisation, rising adoption of electric vehicles, expanding renewable energy capacity, and growing demand for energy-efficient electrical equipment. Government initiatives promoting clean energy and sustainable infrastructure further support regional expansion.
The United States represents the largest market in North America, driven by increasing investments in electrical infrastructure, expanding EV manufacturing, rising demand for high-efficiency transformers, and ongoing modernisation of ageing power grids.
Canada is experiencing steady market growth due to increasing renewable energy projects, investments in power transmission infrastructure, growing adoption of electric vehicles, and rising demand for energy-efficient electrical components.
Europe accounted for 19.7% of the global market, valued at USD 8.78 billion in 2025, and is projected to register the fastest CAGR of 8.4% during the forecast period. Growth is supported by stringent energy efficiency regulations, increasing renewable energy integration, expanding EV production, and rising investments in smart grid infrastructure across the region.
Germany leads the European market owing to its strong automotive industry, advanced electrical equipment manufacturing, increasing production of electric vehicles, and continuous investments in renewable energy and industrial automation.
The United Kingdom is witnessing increasing demand for electrical steel due to investments in offshore wind energy, grid modernisation initiatives, growing adoption of electric vehicles, and expanding deployment of energy-efficient electrical systems.
Latin America represented 6.9% of the global market, totaling USD 3.07 billion in 2025. Market growth is supported by increasing investments in power generation, expanding industrial activities, rising renewable energy projects, and growing demand for efficient electrical transmission and distribution equipment.
Brazil is the largest market in Latin America, driven by expanding electricity infrastructure, increasing industrial production, growing renewable energy investments, and rising demand for transformers and electric motors.
Mexico continues to experience market growth due to expanding automotive manufacturing, increasing industrial automation, growing investments in power infrastructure, and rising demand for energy-efficient electrical equipment.
The Middle East & Africa represented 6.2% of the global market, totaling USD 2.76 billion in 2025. Rising investments in power infrastructure, increasing renewable energy capacity, expanding industrial development, and growing electricity demand are supporting regional market growth.
The UAE is a key market in the Middle East, driven by smart grid development, expanding renewable energy projects, increasing investments in modern electrical infrastructure, and growing demand for high-efficiency transformers and electrical equipment.
Africa is witnessing gradual market growth, supported by expanding electricity access, increasing investments in transmission and distribution networks, rising renewable energy installations, and growing industrialisation. Countries such as South Africa, Egypt, and Nigeria are creating long-term growth opportunities for electrical steel manufacturers.
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Author's Details
Research Head
Ismail Sutaria is a market intelligence and strategy professional with over 12 years of experience advising organizations across the chemicals, packaging, industrial machinery, and energy & power sectors. He specializes in delivering data-driven market assessments, commercial due diligence, industry benchmarking, demand forecasting, competitive strategy, and growth advisory that enable businesses to make confident investment and expansion decisions in complex industrial markets.
His expertise spans specialty and commodity chemicals, advanced and sustainable packaging solutions, industrial automation, manufacturing equipment, process engineering, renewable energy, conventional power generation, electrical infrastructure, and industrial technologies. Ismail has developed deep domain knowledge in evaluating market ecosystems, technology evolution, regulatory frameworks, supply-demand dynamics, pricing trends, value chain structures, and competitive landscapes across global and regional markets.
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