Electrical Steel Market to Reach US$68 Bn by 2031, Driven by EV Growth and Energy Efficiency

The global market for electrical steel is witnessing robust growth, with its value expected to rise from US$40.7 billion in 2024 to US$68 billion by 2031, representing a CAGR of 7.6% over the forecast period. Electrical steel, also known as silicon steel, is a key material used in electrical and electronic applications due to its high magnetic permeability and low energy losses. The material plays a critical role in manufacturing transformers, motors, generators, and other essential electrical components, making it indispensable in the power generation, automotive, and industrial sectors. With the increasing shift toward renewable energy sources and the widespread adoption of electric vehicles (EVs), demand for high-quality electrical steel has surged globally, driving market expansion.

The market's growth is being further bolstered by government initiatives supporting energy efficiency, coupled with investments in modernizing power infrastructure. The leading segment within the electrical steel market is grain-oriented electrical steel, primarily used in transformers due to its superior magnetic properties. Regionally, Asia Pacific is expected to dominate the market throughout the forecast period, driven by significant investments in power generation, a rapidly growing EV industry, and the presence of major steel manufacturing hubs in countries such as China, Japan, and India. These factors collectively underpin the strong momentum of the global electrical steel market.

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Key Highlights from the Report:

• The global electrical steel market is projected to grow at a CAGR of 7.6% from 2024 to 2031.
• Market value is estimated to increase from US$40.7 billion in 2024 to US$68 billion by 2031.
• Grain-oriented electrical steel remains the leading product segment, driven by transformer demand.
• Asia Pacific is the largest regional market due to high industrial activity and EV adoption.
• Rising investments in renewable energy and power infrastructure are major growth drivers.
• Growing adoption of electric vehicles globally is fueling demand for electrical steel.

Market Segmentation:

The global electrical steel market can be segmented based on product type, end-use industry, and thickness. By product type, the market is classified into grain-oriented (GO) and non-grain-oriented (NGO) electrical steel. Grain-oriented steel is primarily used in transformers for power transmission and distribution due to its high magnetic permeability and low core loss, whereas non-grain-oriented steel is widely applied in electric motors, generators, and automotive components. Based on end-use industries, the market is segmented into power generation, automotive, consumer electronics, and industrial machinery. The automotive segment, in particular, has witnessed a surge in demand due to the global transition toward electric vehicles, which rely heavily on electrical steel for motor efficiency. Additionally, segmentation based on thickness allows manufacturers to cater to specific performance requirements for transformers and motor cores, further enhancing market versatility.

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Regional Insights:

Asia Pacific leads the global electrical steel market, supported by rapid industrialization, government-led infrastructure projects, and a booming automotive sector, particularly in China, Japan, and India. North America is another key market, driven by the rising adoption of renewable energy, modernizing power grids, and technological advancements in the EV sector. Europe is projected to witness steady growth due to stringent energy efficiency regulations and investments in clean energy technologies. The Middle East & Africa and Latin America regions are gradually gaining traction due to ongoing industrial expansion and increased demand for electrical equipment in emerging economies. Overall, regional trends indicate that market growth is closely aligned with energy policies, EV adoption rates, and industrial modernization initiatives.

Market Drivers:

Several factors are driving the growth of the electrical steel market. First, the global push toward renewable energy sources such as wind and solar has increased demand for transformers and generators, which require high-performance electrical steel. Second, the electrification of the automotive sector is creating substantial demand for non-grain-oriented steel used in EV motors. Third, governments across key regions are promoting energy efficiency through regulatory standards, incentivizing the adoption of electrical steel in power transmission and industrial applications. Furthermore, increasing industrialization and modernization of power grids in emerging markets are stimulating demand for transformers and motor components, thereby boosting market growth.

Market Restraints:

Despite robust growth, the electrical steel market faces certain challenges. The high production cost of grain-oriented electrical steel, coupled with price volatility of raw materials such as iron and silicon, can affect profitability. Additionally, the complex manufacturing processes involved in producing high-quality steel with minimal energy losses may limit scalability for smaller manufacturers. Fluctuating demand in traditional automotive sectors due to economic uncertainty or global supply chain disruptions may also restrain growth temporarily. These factors collectively necessitate strategic planning by manufacturers to maintain competitive advantage.

Market Opportunities:

The global electrical steel market presents numerous growth opportunities. Increasing demand for electric vehicles provides a substantial avenue for non-grain-oriented steel applications in motor cores and traction motors. Expanding renewable energy infrastructure, including smart grids and offshore wind projects, creates a consistent need for grain-oriented steel in transformers and generators. Additionally, technological advancements in thin steel sheets with improved magnetic properties offer new product innovations that can cater to efficiency-driven applications. Emerging markets, particularly in Asia and Africa, present opportunities for manufacturers to capitalize on growing industrialization and rising electricity consumption.

Reasons to Buy the Report:

1. Comprehensive analysis of market trends, growth drivers, and restraints.
2. Detailed segmentation and insights across product types and end-use industries.
3. Strategic insights into regional markets with growth projections and trends.
4. Competitive landscape and company profiles to understand market positioning.
5. Identification of opportunities for investors, manufacturers, and stakeholders to maximize growth potential.

Frequently Asked Questions (FAQs):

How Big is the Global Electrical Steel Market in 2024?
Who are the Key Players in the Global Market for Electrical Steel?
What is the Projected Growth Rate of the Electrical Steel Market?
What is the Market Forecast for Electrical Steel for 2032?
Which Region is Estimated to Dominate the Industry through the Forecast Period?

Company Insights:

• ArcelorMittal S.A.
• Nippon Steel Corporation
• Baoshan Iron & Steel Co., Ltd.
• POSCO
• JFE Steel Corporation
• Tata Steel Limited
• Severstal JSC
• Thyssenkrupp AG
• AK Steel Holding Corporation
• Wuhan Iron and Steel Corporation

Recent Developments:

• In 2024, ArcelorMittal launched a new ultra-thin grain-oriented electrical steel product designed for high-efficiency transformers, aiming to reduce energy losses.
• Nippon Steel Corporation expanded its production capacity for non-grain-oriented electrical steel to cater to the rising global demand for electric vehicle motors.

The global electrical steel market is poised for remarkable growth in the coming years, driven by technological advancements, rising demand from the electric vehicle sector, and expanding renewable energy infrastructure. With grain-oriented steel dominating transformer applications and non-grain-oriented steel gaining traction in automotive motors, manufacturers are focusing on innovation to meet evolving market requirements. Regional trends indicate strong growth potential in Asia Pacific, supported by industrial expansion and government initiatives, while North America and Europe continue to invest in energy efficiency and modernization. Companies operating in the market are leveraging strategic partnerships, product innovations, and capacity expansions to strengthen their market presence. As the demand for sustainable and energy-efficient solutions grows, the global electrical steel market is expected to witness sustained growth, offering lucrative opportunities for manufacturers, investors, and stakeholders worldwide.

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