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

Electrical Steel Market size is projected at USD 15060.17 million in 2026 and is expected to hit USD 37762.85 million by 2035 with a CAGR of 10.75%.

The electrical steel market is witnessing strong expansion due to rising transformer installations, electric vehicle production, and grid modernization projects across 48 major manufacturing countries. Global electrical steel output crossed 15 million tons in 2025, with non-oriented electrical steel accounting for 61% of total consumption. Transformer-grade grain-oriented electrical steel represented 39% of industrial demand due to increasing power transmission infrastructure. More than 72% of electrical motors manufactured globally use electrical steel laminations for energy efficiency enhancement. Asia-Pacific contributed 58% of total electrical steel production capacity, while automotive applications consumed 31% of worldwide electrical steel volumes during 2025 due to accelerated electric mobility manufacturing activities.

The United States electrical steel market recorded more than 1.9 million tons of domestic consumption in 2025, supported by transformer modernization and electric vehicle assembly expansion across 31 states. Approximately 68% of U.S. electrical steel demand originated from energy infrastructure and industrial motor manufacturing applications. The country imported over 420 thousand tons of grain-oriented electrical steel due to growing transmission transformer installations. Electric vehicle motor production increased 27% in the USA during 2025, directly supporting non-oriented electrical steel consumption. More than 54% of utility transformer replacements in the United States incorporated high-permeability electrical steel cores for reducing energy losses and improving operational efficiency.

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Key Findings

• Key Market Driver: Transformer modernization projects contributed 46% demand growth, while electric vehicle motor applications accounted for 34% of additional electrical steel consumption.
• Major Market Restraint: Raw material price fluctuations impacted 41% of manufacturers, while energy-intensive processing costs affected 37% of production facilities.
• Emerging Trends: High-permeability electrical steel adoption increased 39%, ultra-thin gauge steel utilization expanded 32%,
• Regional Leadership: Asia-Pacific controlled 58% market share, Europe accounted for 21% consumption share, North America represented 14% demand participation.
• Competitive Landscape: Top five manufacturers controlled 52% production capacity, integrated steel producers represented 63% of premium electrical steel output.
• Market Segmentation: Non-oriented electrical steel captured 61% market share, oriented electrical steel accounted for 39% participation.
• Recent Development: Production line modernization increased 33%, hydrogen-based steel processing investments expanded 24%, transformer-grade material output rose 28%.

Electrical Steel Market Latest Trends

The electrical steel market is experiencing substantial transformation due to electrification projects, energy efficiency regulations, and electric mobility expansion. Ultra-thin electrical steel sheets below 0.20 mm thickness accounted for 22% of newly manufactured premium motor applications during 2025. High-efficiency transformer installations increased 36% globally, creating stronger demand for grain-oriented electrical steel with magnetic flux density exceeding 1.90 Tesla. Approximately 47% of industrial motor manufacturers shifted toward advanced non-oriented electrical steel grades for reducing core losses and improving rotational efficiency. Electric vehicle manufacturing remains one of the strongest growth contributors, with over 28 million electric vehicles produced globally in 2025, increasing electrical steel utilization in traction motors.

Automotive applications consumed nearly 4.6 million tons of non-oriented electrical steel during the year. Renewable energy expansion also accelerated market demand, as wind turbine generators required over 780 thousand tons of electrical steel laminations worldwide. Smart grid investments across 42 countries further supported transformer steel consumption, particularly in high-voltage transmission applications. Laser-scribed grain-oriented electrical steel adoption expanded 31% among premium transformer manufacturers because it reduces energy loss by nearly 10%. Manufacturers also increased investments in hydrogen-based steelmaking technologies, with 19 pilot facilities commissioned globally for low-emission electrical steel production. Digital quality inspection systems using AI-based monitoring reached implementation in 44% of newly upgraded production lines during 2025, improving magnetic property consistency and manufacturing precision.

Electrical Steel Market Dynamics

DRIVER

"Rising demand for electric vehicles and power transmission infrastructure."

The increasing deployment of electric vehicles and grid expansion projects is significantly driving electrical steel demand worldwide. More than 28 million electric vehicles manufactured during 2025 utilized high-grade non-oriented electrical steel in traction motors and battery management systems. Automotive motor efficiency regulations in 34 countries increased demand for low-core-loss electrical steel grades by 38%. Global transformer installations surpassed 9.2 million units during the year, supporting grain-oriented electrical steel procurement. Renewable power generation capacity additions exceeded 510 GW in 2025, increasing transformer and generator steel consumption across utility projects. Industrial motor replacement programs across manufacturing facilities improved demand by 26%, while smart grid investments in 41 nations accelerated transformer core modernization activities.

RESTRAINT

"High manufacturing costs and volatile raw material prices."

Electrical steel manufacturing involves energy-intensive processing, annealing, and precision coating technologies, creating significant cost pressures for producers. More than 43% of manufacturers reported operational cost increases due to electricity consumption during rolling and heat treatment processes. Silicon and alloy material price fluctuations impacted approximately 39% of supply chain contracts globally. Premium grain-oriented electrical steel production requires advanced equipment with precision tolerances below 0.03 mm, limiting entry opportunities for smaller manufacturers. Import dependency for specialized steel grades affected 27% of regional buyers in North America and Europe. Environmental compliance requirements also increased capital expenditure burdens, with 24% of steel facilities upgrading emission control systems during 2025 to meet stricter industrial regulations.

OPPORTUNITY

"Expansion of renewable energy and energy-efficient equipment manufacturing."

Renewable energy installations are creating major opportunities for electrical steel manufacturers due to increasing generator and transformer production requirements. Wind turbine manufacturing exceeded 128 thousand units globally during 2025, significantly increasing electrical steel demand in generator cores. Solar power infrastructure projects across 52 countries supported transformer installations for transmission connectivity. Industrial efficiency standards introduced in 37 economies increased replacement demand for high-performance motors utilizing advanced non-oriented electrical steel. Data center expansion also contributed to transformer procurement growth, with more than 11 thousand new facilities requiring stable power infrastructure. Smart appliance manufacturing increased 23%, supporting electrical steel usage in compressors and energy-efficient household motors. Investments in low-carbon steelmaking technologies further opened opportunities for environmentally compliant electrical steel production.

CHALLENGE

"Supply chain disruptions and limited production capacity for premium grades."

The electrical steel market faces challenges related to limited premium-grade production capacity and logistical disruptions across global supply chains. Approximately 31% of transformer manufacturers experienced procurement delays for grain-oriented electrical steel during 2025. Specialized electrical steel production lines require processing temperatures above 1,100°C and advanced rolling systems, limiting rapid capacity expansion. Asia-Pacific controlled nearly 58% of global production capacity, creating dependency risks for other regions. Transportation costs for steel coils increased 18% due to shipping congestion and fuel price volatility. Automotive manufacturers also competed with utility companies for premium non-oriented electrical steel supplies, resulting in allocation pressure across suppliers. Environmental regulations affecting blast furnace operations caused temporary production reductions at 14 major steel plants globally.

Electrical Steel Market Segmentation

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By Type

Oriented Electrical Steels: Oriented electrical steels accounted for 39% of global market demand during 2025 due to increasing transformer manufacturing and power transmission expansion. Grain-oriented electrical steel provides magnetic permeability exceeding 1.92 Tesla, supporting efficient transformer core performance. More than 9.2 million transformers manufactured globally incorporated oriented electrical steel laminations. Utility infrastructure modernization projects across 43 countries accelerated demand for high-permeability grades with lower core losses. Asia-Pacific produced nearly 63% of worldwide oriented electrical steel volumes, while Europe represented 19% of premium transformer steel consumption. Laser-scribed oriented electrical steel adoption increased 31% because it reduced energy losses by approximately 10%. Investments in ultra-low-loss transformer materials expanded 22% among major manufacturers during 2025.

Non-oriented Electrical Steels: Non-oriented electrical steels dominated the market with 61% share due to broad applications in motors, generators, and electric vehicles. More than 4.6 million tons of non-oriented electrical steel were consumed by automotive manufacturers during 2025. Industrial motor manufacturing contributed 46% of total non-oriented steel demand globally. High-speed traction motors for electric vehicles required steel grades with magnetic losses below 2.5 W/kg, increasing premium product adoption. China, Japan, and South Korea collectively accounted for 57% of global non-oriented electrical steel production. Advanced thin-gauge steel below 0.20 mm thickness represented 24% of premium motor manufacturing demand. Industrial automation growth across 39 economies also supported stronger procurement of non-oriented electrical steel materials.

By Application

Household: Household appliance applications represented 25% of global electrical steel consumption due to strong production of energy-efficient appliances. More than 620 million refrigerators, washing machines, and air-conditioning units manufactured during 2025 utilized electrical steel components in compressor motors and rotating systems. Energy efficiency regulations across 32 countries accelerated the use of low-loss electrical steel in household motors. Asia-Pacific accounted for 64% of household appliance electrical steel demand due to high manufacturing concentration in China, India, and Southeast Asia. Advanced inverter-based appliances increased electrical steel utilization by 18% compared to conventional systems. Manufacturers increasingly adopted ultra-thin laminations to reduce noise levels and improve motor efficiency in premium consumer appliances.

Industrial: Industrial applications held 44% market share because of large-scale motor, generator, and machinery installations across manufacturing facilities. More than 300 million industrial motors produced globally during 2025 incorporated non-oriented electrical steel laminations. Heavy industries including mining, chemicals, and steel manufacturing accounted for 36% of industrial motor demand. Smart factory expansion projects in 28 countries accelerated replacement of conventional motors with high-efficiency IE4 and IE5 systems. Industrial transformers consumed nearly 2.8 million tons of grain-oriented electrical steel globally. Automation equipment installations increased 21%, supporting stronger demand for precision electrical steel grades. Energy-saving mandates across industrial sectors reduced reliance on low-efficiency motor systems and increased premium electrical steel penetration.

Automotive: Automotive applications accounted for 31% of electrical steel consumption due to rapid electric vehicle production expansion. More than 28 million electric vehicles manufactured globally during 2025 required high-grade non-oriented electrical steel in traction motors. Premium electric vehicle motors utilized steel laminations with thickness below 0.25 mm for reducing eddy current losses. Europe represented 24% of automotive electrical steel demand because of strong EV adoption policies. Hybrid vehicle production increased 19%, supporting additional demand for high-speed motor steel. Automotive manufacturers invested heavily in axial flux motor technologies requiring advanced magnetic steel properties. Battery electric vehicle platforms consumed approximately 35 kg of electrical steel per vehicle, while commercial electric buses utilized nearly 95 kg per unit.

Electrical Steel Market Regional Outlook

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North America

North America accounted for 14% of global electrical steel market demand during 2025 due to strong transformer replacement programs and electric vehicle manufacturing growth. The United States represented nearly 82% of regional consumption, supported by utility grid modernization across 31 states. More than 420 thousand tons of grain-oriented electrical steel were imported into North America for transformer manufacturing applications. Industrial motor replacement initiatives increased demand for premium non-oriented electrical steel by 24%. Canada expanded renewable energy transmission infrastructure by installing over 16 thousand high-voltage transformers during 2025. Electric vehicle assembly plants across the United States and Mexico consumed approximately 690 thousand tons of non-oriented electrical steel.

North America also experienced strong investment activity in domestic electrical steel production facilities. More than 11 modernization projects were announced for advanced steel processing and annealing systems. Automotive manufacturers focused on high-efficiency traction motor development requiring ultra-thin electrical steel laminations below 0.25 mm thickness. Transformer replacement demand increased due to aging power infrastructure, with over 58% of regional transformers operating beyond 25 years of service life. Industrial automation projects across manufacturing facilities further increased premium motor steel consumption. Renewable energy capacity additions surpassed 89 GW in North America during 2025, creating additional demand for transformers and generator steel components.

Europe

Europe captured 21% of global electrical steel market share during 2025 due to aggressive electrification policies and renewable energy integration programs. Germany, France, and Italy collectively represented 56% of regional demand for transformer and motor-grade electrical steel. More than 7.8 million electric vehicles operating across Europe increased demand for non-oriented electrical steel in traction motors and charging infrastructure. Wind turbine manufacturing across the region consumed approximately 520 thousand tons of electrical steel laminations during 2025. Industrial efficiency regulations in the European Union accelerated replacement of low-efficiency motors with advanced IE4 systems.

Transformer modernization remained a major driver in Europe, with over 92 thousand grid transformers upgraded during 2025 to improve transmission efficiency. Premium grain-oriented electrical steel with magnetic permeability above 1.90 Tesla represented 41% of regional transformer material consumption. Europe also expanded low-emission steel manufacturing initiatives, with 14 hydrogen-based pilot projects supporting sustainable electrical steel production. Automotive suppliers in Germany and Sweden invested heavily in axial flux motor technologies requiring advanced magnetic steel grades. Industrial robotics installations increased 18% across Europe, further strengthening demand for non-oriented electrical steel used in automation motors and precision machinery applications.

Asia-Pacific

Asia-Pacific dominated the electrical steel market with 58% share during 2025 due to massive steel production capacity, electric vehicle manufacturing, and infrastructure expansion projects. China alone accounted for nearly 43% of global electrical steel production volumes. Japan and South Korea collectively contributed 22% of premium-grade grain-oriented electrical steel output. More than 18 million electric vehicles produced across Asia-Pacific significantly increased demand for non-oriented electrical steel laminations. Renewable energy installations exceeded 320 GW across the region, supporting transformer and generator manufacturing growth.

Industrial motor production in Asia-Pacific surpassed 180 million units during 2025, representing 60% of worldwide output. India expanded transformer manufacturing capacity by 17% to support national grid modernization projects. Southeast Asian countries invested heavily in urban electrification infrastructure, increasing regional electrical steel consumption by 23%. Automotive manufacturing clusters across China, Japan, and South Korea focused on high-speed electric motors requiring advanced steel grades with reduced magnetic losses. More than 70% of household appliance production globally was concentrated in Asia-Pacific, creating sustained demand for compressor-grade electrical steel. Large integrated steel producers also expanded continuous annealing lines for premium electrical steel manufacturing.

Middle East & Africa

Middle East & Africa represented 7% of global electrical steel demand during 2025 due to rising electrification projects and industrial infrastructure expansion. Gulf countries invested heavily in smart grid deployment, increasing transformer procurement by 26% across regional utility projects. Saudi Arabia and the United Arab Emirates accounted for 48% of Middle Eastern electrical steel consumption. More than 38 thousand transformers were installed across power transmission projects during 2025. Renewable energy developments, particularly solar parks, significantly supported demand for grain-oriented electrical steel in transmission infrastructure.

Africa experienced increasing industrialization and electrification initiatives across 19 countries, boosting demand for industrial motors and transformers. South Africa represented 31% of African electrical steel consumption due to mining and manufacturing operations. Industrial motor imports increased 22% across African economies during 2025, supporting stronger non-oriented electrical steel demand. Transmission expansion projects added over 14 thousand kilometers of new power lines across the continent. Regional manufacturers also invested in transformer assembly plants to reduce import dependency. Infrastructure modernization projects in ports, railways, and industrial zones accelerated procurement of energy-efficient electrical equipment utilizing advanced electrical steel laminations.

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

List of Top Two Companies Market Share

• China Baowu Steel Group held approximately 18% of global electrical steel production capacity during 2025, supported by integrated steel operations across 12 manufacturing complexes and annual output exceeding 4 million tons of specialty electrical steel products.
• Nippon Steel Corporation accounted for nearly 11% of global market share through advanced grain-oriented electrical steel manufacturing, supplying premium transformer-grade materials to more than 40 international markets.

Investment Analysis and Opportunities

Global investments in electrical steel manufacturing increased substantially during 2025 due to electric vehicle expansion and power infrastructure modernization. More than 34 large-scale production expansion projects were announced globally for advanced electrical steel processing lines. Asia-Pacific attracted approximately 61% of total industrial investment activity because of strong automotive and transformer manufacturing ecosystems. Steel producers commissioned over 19 new continuous annealing facilities to improve premium-grade output capacity. Investments in ultra-thin non-oriented electrical steel production increased 28% due to rising traction motor demand from electric vehicle manufacturers.

North America and Europe focused on localized electrical steel supply chains to reduce import dependency for transformer applications. More than 11 transformer-grade electrical steel projects were initiated across the United States and Europe during 2025. Renewable energy infrastructure investments also created opportunities for grain-oriented electrical steel suppliers, as over 510 GW of renewable power additions required transformers and generators. Hydrogen-based steelmaking technologies attracted increasing investment attention, with 14 pilot facilities launched for low-emission electrical steel production. Smart manufacturing technologies using AI-based inspection systems improved quality consistency by nearly 17%, enhancing operational competitiveness for modernized steel producers.

New Product Development

Manufacturers are focusing on advanced magnetic steel technologies to improve energy efficiency and reduce power losses across industrial applications. Ultra-thin electrical steel laminations below 0.20 mm thickness gained commercial adoption in high-speed electric vehicle motors during 2025. More than 27 new premium non-oriented electrical steel grades were introduced globally for automotive traction applications. High-permeability grain-oriented electrical steel with magnetic induction above 1.92 Tesla expanded utilization in energy-efficient transformers. Laser-scribed electrical steel products reduced no-load transformer losses by approximately 10%, improving operational efficiency in utility infrastructure.

Advanced coating technologies also improved insulation resistance and thermal stability in electrical steel laminations. More than 44% of newly developed products incorporated enhanced coating systems for high-frequency motor applications. Japanese and South Korean manufacturers introduced next-generation steel grades optimized for axial flux electric motors with rotational speeds above 18 thousand RPM. Industrial motor manufacturers increasingly adopted low-core-loss electrical steel with reduced hysteresis performance for automation systems. AI-assisted production monitoring technologies improved magnetic property consistency by nearly 15%, allowing manufacturers to produce highly specialized electrical steel products for renewable energy generators, industrial robotics, and premium automotive applications.

Five Recent Developments (2023-2025)

• China Baowu Steel Group expanded high-grade non-oriented electrical steel production capacity by 21% during 2024 through modernization of continuous annealing facilities in China.
• POSCO introduced ultra-thin electrical steel products below 0.18 mm thickness during 2025 for high-speed electric vehicle traction motors.
• Nippon Steel Corporation increased premium grain-oriented electrical steel exports by 17% during 2024 to support transformer manufacturing demand across Asia and Europe.
• ArcelorMittal commissioned advanced coating technology lines during 2025 that improved insulation resistance performance by 14% for industrial motor applications.
• Thyssenkrupp AG launched hydrogen-assisted low-emission electrical steel processing trials during 2023, reducing process-related emissions by 12% in pilot operations.

Report Coverage of Electrical Steel Market

The electrical steel market report provides detailed analysis of production trends, consumption patterns, technological developments, regional performance, and industrial applications across major economies. The report covers oriented and non-oriented electrical steel segments with comprehensive assessment of transformer, automotive, industrial, and household appliance applications. More than 48 manufacturing countries and 120 industrial participants were evaluated to identify competitive positioning and supply chain dynamics. Production capacity analysis includes over 15 million tons of global electrical steel output and regional trade flow assessment exceeding 5.3 million tons.

The report also evaluates technological advancements including laser-scribed steel, ultra-thin laminations, AI-assisted manufacturing systems, and hydrogen-based steelmaking initiatives. Automotive electrification trends involving more than 28 million electric vehicles were analyzed for their impact on non-oriented electrical steel demand. Renewable energy infrastructure projects exceeding 510 GW were assessed to understand transformer and generator steel consumption patterns. Regional analysis includes Asia-Pacific, North America, Europe, and Middle East & Africa with detailed evaluation of industrial investments, utility infrastructure upgrades, and premium electrical steel production capabilities.