Electrical Steel Market

Electrical Steel Market Outlook (2024 to 2034)

With projections to expand at a CAGR of 8.5%, as per this latest study by Fact.MR, the global electrical steel market is expected to increase from a valuation of US$ 30.7 billion in 2024 to US$ 69.4 billion by the end of 2034.

Electrical steel exhibits superior moldability and lightweight properties compared to conventional steel, making it a preferred choice for electronic systems in automobiles, where manufacturers prioritize enhancing features while minimizing vehicle weight. The increasing sales of automobiles are notably bolstering the growth of the electrical steel market.

With high-powered electrical steel core motors installed in hybrid/electric vehicles, the demand for non-grain-oriented electrical steel (NGOES) is rising to ensure efficient and seamless operation. In addition, the automotive sector relies on several small transformers and inductors that necessitate electrical steel, further propelling electrical steel market growth throughout the forecast period.

• In 2022, POSCO started the construction of an electrical steel production facility. The steel manufacturer in South Korea plans to invest US$ 805 million in the construction of the plant. The facility will have an annual production capacity of 300,000 tons of NOES.

Growing emphasis on energy efficiency by governments is also driving demand for electrical steel. Governments in countries like India, the UAE, and China are rolling out initiatives aimed at enhancing power generation, which is forecasted to drive market growth. The market is witnessing a trend towards smart transformers, along with the replacement of aging transformers and advancements in transmission lines, all poised to trigger a notable uptick in product demand.

Electrical steel, recognized for its high efficiency and sustainability, aligns well with the United Nations' sustainable development agenda, offering vendors in the electrical steel market substantial revenue opportunities. The landscape of electrical steel production is evolving as manufacturers capitalize on the demand for hybrid electric vehicles and increased wear-resistant steel plate manufacturing.

Report Attribute	Detail
Electrical Steel Market Size (2024E)	US$ 30.7 Billion
Projected Market Value (2034F)	US$ 69.4 Billion
Global Market Growth Rate (2024 to 2034)	8.5% CAGR
China Market Value (2034F)	US$ 11.2 Billion
Canada Market Growth Rate (2024 to 2034)	13.4% CAGR
North America Market Share (2024E)	18.5%
East Asia Market Value (2034F)	US$ 19.6 Billion
Key Companies Profiled	Novolipetsk Steel; Voestalpine Stahl GmbH; POSCO; Nippon Steel; Sumitomo Metal Corporation; ThyssenKrupp AG; JFE Steel Corporation; Cogent Power; ArcelorMittal SA; Aperam SA

Will Industrialization and Urbanization Influence Sales of Electrical Steel?

“Increasing Demand for High-Speed Vehicles and Improved Per Capita Electricity Consumption”

Key market driver is the escalating demand for electricity fueled by industrialization and urbanization. Electrical steel, known for its consistent magnetic properties and high permeability, plays a pivotal role in electricity generation, distribution, and consumption, finding wide-ranging applications in transformers, motors, inductors, and other electromagnetic devices.

Another significant factor is the burgeoning electric vehicles (EVs) industry, where electrical steel contributes to enhanced motor efficiency. The rising production of EVs is boosting the demand for electric motors, consequently augmenting the use of electrical steel.

Technological advancements in the electrical industry and the increasing utilization of electrical steel in the power sector are contributing to the expansion of the electrical market size. The growing demand for high-speed vehicles and improved per capita electricity consumption further drive market expansion. However, the market faces challenges, including the high price of raw materials, which significantly hampers growth. Despite these obstacles, the market is poised for significant growth from 2024 to 2034.

Which Electrical Steel Market Trends are Significant for Manufacturers?

“Increasing Infrastructure Development Projects and EV Production”

Increasing electricity generation worldwide is a key driving factor. Electrical steel possesses enhanced electrical properties such as high permeability, high electrical resistivity, low hysteresis loss, and low magnetostriction, making it highly desirable for applications related to electricity consumption, distribution, and generation. The growth of the electric vehicle (EV) industry is another driver for the market. Electrical steel contains specific magnetic properties crucial for use in rotors and stators in EV motors.

Electrical steel helps enhance motor efficiency by minimizing core energy losses and accelerating the vehicle’s range. Rising EV production is driving the use of electric motors while increasing infrastructure development activities such as the construction of power grids, electrical transformers, and distribution networks are also contributing to the demand for electrical steel.

Country-wise Insights

Fact.MR, a market research and competitive intelligence provider, through its newly published analysis, asserts that North America is projected to hold 27.9% share of the global market by 2034. Manufacturers of electrical steel have broadened their presence to various international regions such as Southeast Asia, Central and South America, and Australia. This expansion enables them to diversify their supply chains, thereby reducing dependence on a single supplier.

What is Driving Electrical Steel Sales in the United States?

“Rising Generation and Adoption of Renewable Energy”

Attribute	United States
Market Value (2024E)	US$ 4.1 Billion
Growth Rate (2024 to 2034)	13.3% CAGR
Projected Value (2034F)	US$ 14.2 Billion

Electrical steel sales in the United States are fueled by several key factors. Government incentives and emission regulations encouraging electric vehicle (EV) adoption are key drivers. This is boosting the demand for electrical steel used in EV motors. In addition, the significant generation and adoption of renewable energy, particularly wind and solar power is driving the need for electrical steel in generators and transformers.

Infrastructure modernization initiatives, including power grid upgradation, are further boosting demand for electrical steel. Ongoing research and development efforts in the automotive and energy sectors of the nation are driving innovation.

Why Does China Hold a Leading Position in the East Asia Market?

“Growing Demand for Energy-Efficient Equipment”

Attribute	China
Market Value (2024E)	US$ 3.4 Billion
Growth Rate (2024 to 2034)	12.8% CAGR
Projected Value (2034F)	US$ 11.2 Million

China dominates the market in East Asia due to several reasons. China's steel industry is heavily biased towards integrated blast furnace–converter route. Increasing industrialization and urbanization in China have led to a rise in the demand for energy-efficient equipment. This has resulted in a surge in the consumption of electrical steel which is a crucial component in the manufacturing of various electrical components such as transformers, motors, generators, and other electrical equipment.

China's growing automotive industry, particularly the electric vehicle segment, has also contributed to the high demand for electrical steel. These factors combined have enabled China to dominate the market in East Asia.

Category-wise Insights

The electrical steel market is categorized into three segments such as inductors, motors, and transformers, based on application. Out of these segments, transformers are estimated to account for a leading electrical steel market share of 39.4% in 2024.

Which Factors are Driving Use of Electrical Steel in Transformers?

“Robust Magnetic Permeability of Electrical Steel Driving Use in Transformer Manufacturing”

Attribute	Transformers
Segment Value (2024E)	US$ 12.1 Billion
Growth Rate (2024 to 2034)	8.3% CAGR
Projected Value (2034F)	US$ 26.8 Billion

Increasing complexity of electrical grids and the proliferation of digital loads have heightened the demand for transformers. The penetration of electric vehicles (EVs) and the expansion of decentralized generation have further amplified this demand. Electrical steel, known for its robust magnetic permeability, is predominantly utilized in the power industry, making it a vital component in transformer manufacturing. Increased industrial development and escalating electricity consumption further contribute to the rising demand for transformers. These indispensable components efficiently and safely transmit and distribute electricity within power systems.

Growing emphasis on green energy and advancements in the transformer industry bolster market growth. The reconstruction and modernization of aging power infrastructure stand as significant factors driving this trend. Furthermore, the increasing adoption of renewable power, particularly in the United States and Europe, alongside the replacement of aging transformers, is fueling market expansion. The need for compliance with energy efficiency regulations is also driving demand for transformers.

Which Properties of Non-Grain Oriented Electrical Steel are Key?

“Low Core Loss of Non-Grain Oriented Electrical Steel”

Attribute	Non-Grain Oriented
Segment Value (2024E)	US$ 16.9 Billion
Growth Rate (2024 to 2034)	8.3% CAGR
Projected Value (2034F)	US$ 37.6 Billion

Non-grain-oriented product type holds a leading market share. This category of electrical steel is known for its uniform magnetic properties in all directions and is extensively used in the manufacturing of iron cores for high-speed motors due to its superior performance. The increasing demand for energy-efficient motors and transformers across various industries, coupled with the growing emphasis on reducing energy loss, has significantly contributed to the dominance of non-grain-oriented electrical steel in the market. Its unique properties, such as high permeability and low core loss, make it an ideal choice for a wide range of applications, further solidifying its leading position in the market.

Competitive Landscape

Key players in the electrical steel market are Novolipetsk Steel, Voestalpine Stahl GmbH, POSCO, Nippon Steel, Sumitomo Metal Corporation, ThyssenKrupp AG, JFE Steel Corporation, Cogent Power, ArcelorMittal SA, and Aperam SA. Electrical steel manufacturers are forming partnerships with other globally recognized suppliers to develop new technologies and drive market growth into new horizons.

• In 2021, JSW Steel and JFE Steel Corporation inked a memorandum of understanding (MoU) to carry out a feasibility study for the establishment of a GOES sheet manufacturing and sales joint-venture company in India.

Key Segments of Electrical Steel Market Research

• By Product Type :

  • Grain-Oriented
  • Non-Grain Oriented

• By Application :

  • Inductors
  • Motors
  • Transformers

• By End Use :

  • Automobiles
  • Manufacturing
  • Energy Generation
  • Household Appliances

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africa