Electrical Steel Market Size & Share Analysis | Forecast 2034

The global electrical steel market was valued at approximately USD 46.43 billion in 2024. With increasing demand from energy-efficient applications, the market is projected to grow at a compound annual growth rate (CAGR) of 7.20% during the forecast period of 2025-2034, reaching an estimated USD 93.06 billion by 2034. Electrical steel, also known as magnetic steel or silicon steel, plays a pivotal role in industries like electrical power generation, transmission, and distribution, along with transportation applications such as electric vehicles (EVs) and electric motors.

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This growth is driven by the rising demand for energy-efficient electric motors, transformers, and generators. As industries move toward renewable energy solutions and electric mobility, the demand for electrical steel is poised to increase significantly. Furthermore, innovations in high-efficiency electrical steel are fueling the adoption of advanced electrical devices across various sectors, thus contributing to market expansion.

Key Drivers of the Electrical Steel Market Growth

Growing Demand for Energy-Efficient Motors

The demand for energy-efficient electric motors is one of the most significant drivers of the electrical steel market. As industries increasingly focus on energy conservation, motors that consume less power and operate efficiently are essential. Electrical steel's magnetic properties make it ideal for manufacturing electric motors used in a wide range of applications, from household appliances to industrial machinery and electric vehicles.

Electrical steel reduces energy loss and enhances the performance of electric motors by providing optimal magnetic permeability. This makes it a vital component in applications such as HVAC systems, electric vehicle (EV) motors, and industrial pumps.

The growing demand for high-efficiency motors in industries, coupled with government regulations favoring energy conservation, is expected to drive the demand for electrical steel in the coming years. Additionally, the increasing adoption of electric vehicles is likely to further fuel the demand for electrical steel, as these vehicles rely heavily on efficient electric motors for propulsion.

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Expansion of the Renewable Energy Sector

With the global push for cleaner, renewable energy, electrical steel has become a key material in the construction of transformers, generators, and wind turbines. These energy systems require efficient electrical components that can handle high-frequency and high-voltage applications, making electrical steel indispensable in power generation and distribution.

The rising global demand for wind power and solar energy, combined with increasing investments in smart grid infrastructure, is accelerating the need for high-performance electrical steel. This trend is particularly evident in the growing deployment of wind turbines and offshore wind farms, which rely on high-efficiency transformers and generators made from electrical steel.

Governments worldwide are investing in renewable energy initiatives and smart grid solutions, further contributing to the growth of the electrical steel market as these technologies require specialized steel with superior magnetic properties.

Increase in Electric Vehicle (EV) Adoption

The electric vehicle market is another key driver for the electrical steel industry. As automakers ramp up production of electric vehicles to meet growing consumer demand and governmental emissions targets, the need for efficient, high-performance motors increases. EV motors rely heavily on electrical steel, which helps improve motor performance by reducing energy losses and increasing overall efficiency.

The rapid expansion of the electric vehicle market, especially in China, Europe, and the United States, is projected to significantly boost the demand for electrical steel. With automakers such as Tesla, BYD, and Volkswagen leading the EV market, the adoption of high-quality electrical steel for manufacturing motors and other EV components is expected to grow.

Additionally, as EV manufacturers push for longer battery ranges, lighter vehicles, and improved performance, the role of high-performance electrical steel will continue to be critical in supporting these advancements.

Technological Advancements in Electrical Steel Production

Technological advancements in the production of electrical steel have improved its performance, efficiency, and cost-effectiveness. Innovations such as the development of grain-oriented electrical steel (GOES) and non-grain-oriented electrical steel (NGOES) have resulted in products with higher magnetic permeability and reduced core losses.

Grain-oriented electrical steel (GOES) is mainly used in transformers and generators, while non-grain-oriented electrical steel (NGOES) is used in electric motors and appliances. As technological advancements continue, manufacturers are focusing on improving production processes to reduce material waste and enhance the properties of electrical steel, thus driving the market forward.

Furthermore, new technologies in surface treatment and coating processes are enhancing the magnetic properties of electrical steel, making it even more efficient for use in energy and transportation sectors.

Regulatory Support and Sustainability Initiatives

Governments around the world are increasingly focusing on sustainability and carbon reduction strategies. With growing environmental concerns, governments are implementing stricter energy efficiency standards for various sectors, including automotive and power generation. This regulatory push is driving the demand for energy-efficient components, including electrical motors, transformers, and generators made from electrical steel.

Several countries, including the United States, Germany, and China, are adopting policies that support the transition to renewable energy sources and electric vehicles. Such regulatory efforts are promoting the use of advanced materials like electrical steel, which plays a key role in improving the energy efficiency of devices used in these industries.

Market Segmentation

By Type of Electrical Steel

Electrical steel can be divided into two primary categories:

Grain-Oriented Electrical Steel (GOES): Used primarily in transformers and large electrical machines, GOES offers excellent magnetic properties and reduced energy loss.

Non-Grain-Oriented Electrical Steel (NGOES): This type of electrical steel is typically used in electric motors, home appliances, and small generators, where flexibility and performance are crucial.

The demand for GOES is driven by the power generation and transmission sector, while NGOES is more commonly used in industries like automotive manufacturing, home appliances, and renewable energy systems.

By Application

Electrical steel is used in various applications across multiple sectors, including:

Automotive: The automotive industry is a major consumer of electrical steel, particularly with the growth of electric vehicles. Electrical steel is used in EV motors and charging systems to enhance energy efficiency.

Power Generation: Electrical steel is used in transformers, generators, and wind turbines to improve energy efficiency and performance.

Consumer Electronics: Electrical steel is also used in appliances such as refrigerators, air conditioners, and washing machines, where efficient motors are crucial.

By Region

North America: The U.S. is a leading market for electrical steel, driven by the demand from the automotive, power generation, and renewable energy sectors.

Europe: Europe is a significant market for electrical steel, particularly in the automotive industry and power generation. The region's focus on sustainability and carbon neutrality is further boosting demand.

Asia-Pacific: The Asia-Pacific region, especially China and India, is a major consumer of electrical steel due to rapid industrialization, the growing electric vehicle market, and the expansion of renewable energy sources.

Latin America and Middle East & Africa: These regions are witnessing moderate growth, with increasing demand for electrical steel driven by investments in power infrastructure and industrialization.

Future Trends in the Electrical Steel Market

Increased Focus on Energy Efficiency

As energy efficiency remains a top priority for governments and industries, the demand for high-efficiency electrical steel will continue to rise. Manufacturers are investing in technologies that reduce energy losses in electrical devices, thus promoting the adoption of electrical steel in transformers, motors, and energy storage systems.

Advancements in Production Technologies

Advancements in the production of electrical steel will continue to shape the market. Innovations in the manufacturing processes of grain-oriented and non-grain-oriented electrical steel, such as improved annealing techniques, are expected to enhance material properties and reduce production costs.

Growth in Electric Vehicle Adoption

With the rise in electric vehicle adoption, electrical steel manufacturers will continue to innovate to meet the demands of electric motor manufacturers. The development of lightweight, high-efficiency electrical steel for use in EV motors is expected to remain a key trend.

In, summary, the global electrical steel market is poised for significant growth, driven by increasing demand in sectors like electric vehicles, renewable energy, and consumer electronics. With a projected CAGR of 7.20% from 2025 to 2034, the market is expected to reach a value of USD 93.06 billion by 2034. As technological advancements, regulatory support, and sustainability initiatives continue to shape the industry, electrical steel will play an increasingly critical role in the global transition to energy-efficient and sustainable solutions.

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