Electrical Steel Market on Course to Reach US$73.3 Bn by 2032 Driven by EV Motors and Power Infrastructure Expansion

Market Overview: Rising Demand for High-Performance Electrical Steel

The electrical steel market has emerged as a critical segment of the global steel industry, driven by its indispensable role in manufacturing energy-efficient electrical equipment. Electrical steel, also known as silicon steel, is specially designed to exhibit superior magnetic properties, making it essential for transformers, generators, motors, and emerging EV powertrains. With global electrification accelerating across industries, demand for electrical steel continues to rise steadily. The shift toward sustainable energy generation, smart grids, and electric mobility has significantly expanded the scope of electrical steel applications, positioning the market for strong long-term growth.

According to the latest study by Persistence Market Research, the global electrical steel market size was valued at US$43.6 Bn in 2025 and is projected to reach US$73.3 Bn by 2032, growing at a CAGR of 7.7% between 2025 and 2032. This growth outlook reflects increasing investments in power infrastructure upgrades, rising electricity consumption, and rapid adoption of electric vehicles. As governments worldwide strengthen renewable energy capacity and industrial electrification, manufacturers are focusing on developing advanced grades of electrical steel to meet performance and efficiency requirements.

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Key Growth Drivers: Electrification and Energy Efficiency Trends

The primary driver accelerating the electrical steel market is the global shift toward electrification. Countries are modernizing transmission and distribution networks to handle growing electricity demand, requiring large volumes of transformer cores made from high-grade electrical steel. Additionally, the integration of renewable energy sources such as wind and solar into national grids has created further demand for transformers and generators, boosting electrical steel consumption. Energy efficiency regulations imposed by governments have also compelled manufacturers to use superior-grade electrical steel to reduce energy losses in electrical equipment.

Another major growth factor is the rising adoption of electric vehicles. EV motors rely heavily on non-oriented electrical steel to ensure high torque and reduced core losses. As automotive manufacturers expand EV production to meet emission reduction targets, the demand for specialized electrical steel grades continues to surge. Industrial automation is another contributor, as factories deploy energy-efficient motors and drives to optimize production operations. Together, these trends are shaping a future where electrical steel plays a foundational role in supporting sustainable industrial and energy ecosystems worldwide.

Market Segmentation: Product Types Defining Application Scope

By Product Type

CRNO (Cold Rolled Non-Oriented)
CRGO (Cold Rolled Grain-Oriented)

Electrical steel is broadly categorized into CRGO and CRNO types, each serving distinct industrial purposes. CRGO electrical steel is primarily used in transformers, where grain orientation helps achieve low magnetic losses and superior permeability. This makes it vital for power transmission and distribution networks. Growing grid modernization projects and cross-border energy interconnections have increased the demand for CRGO steel, especially in high-voltage transformer manufacturing.

CRNO electrical steel, on the other hand, is widely used in rotating machinery such as motors, generators, and alternators. Its uniform magnetic properties in all directions make it suitable for dynamic electromagnetic applications. The rise of EV motors and industrial automation equipment has particularly boosted CRNO steel demand. Manufacturers are investing in technological advancements to produce thinner gauges and higher silicon content grades to enhance performance. The balanced growth of both product types ensures stable expansion of the overall electrical steel market.

End Product Outlook: Transforming Power and Mobility Sectors

By End Product

Transformers
Alternators/Generators
Industrial Motors
EV Motors
Others

Transformers remain the largest end-product segment for electrical steel, supported by ongoing upgrades to aging power grids and increasing rural electrification. As electricity consumption grows globally, utilities are expanding transmission capacity, which directly fuels transformer manufacturing. High-efficiency transformers made with advanced CRGO steel reduce transmission losses and support energy conservation goals.

Motors and generators represent another major consumption area. Industrial motors used in manufacturing plants, HVAC systems, and automation lines require CRNO steel to ensure high efficiency and operational stability. EV motors have emerged as the fastest-growing segment, driven by rapid electric vehicle adoption worldwide. Automakers are seeking lightweight, high-performance electrical steel to improve vehicle range and battery efficiency. With transportation electrification accelerating, EV motor-related electrical steel demand is expected to witness exponential growth over the next decade.

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End-Use Industry Trends: Expanding Applications Across Sectors

By End-use

Energy and Power Generation
Automotive
Industrial Automation
Electronics
Others

The energy and power generation sector accounts for the largest share of electrical steel usage. Investments in renewable energy projects, grid expansions, and smart substations have created consistent demand for transformers and generators. As governments commit to net-zero emission targets, electrification of heating, transport, and industries will further strengthen demand for power infrastructure equipment containing electrical steel.

The automotive sector is rapidly emerging as a high-growth end-use segment. With EV production scaling up, electrical steel has become a strategic material for motor cores, battery management systems, and onboard charging units. Meanwhile, industrial automation continues to expand across manufacturing sectors, requiring high-efficiency motors and drives. The electronics industry also contributes to demand through power supply units, small transformers, and micro-motor applications. These diversified end-use industries ensure sustained market growth and reduce dependency on a single sector.

Regional Analysis: Asia Pacific Leading Global Expansion

By Region

North America
Europe
East Asia
South Asia and Oceania
Latin America
Middle East and Africa

East Asia dominates the global electrical steel market, led by China, Japan, and South Korea. These countries house major steel producers and advanced manufacturing hubs for electronics, automobiles, and power equipment. Massive investments in EV production and renewable energy infrastructure have further solidified East Asia's leadership position. South Asia and Oceania, particularly India, are witnessing strong growth due to rapid electrification and grid expansion initiatives.

Europe and North America continue to invest in upgrading aging power grids and expanding EV charging networks, driving consistent demand for high-grade electrical steel. Europe's aggressive decarbonization policies and EV mandates are major contributors to market expansion. Latin America and the Middle East & Africa are emerging markets where increasing electrification and industrialization are creating new opportunities. Together, these regional trends illustrate a globally synchronized growth pattern for the electrical steel industry.

Competitive Landscape: Innovation and Capacity Expansion

The electrical steel market is highly competitive, with manufacturers focusing on capacity expansion, advanced metallurgy, and sustainable production methods. Companies are developing ultra-thin gauge electrical steel to reduce core losses and improve motor efficiency. Strategic collaborations with automotive OEMs and power equipment manufacturers are also increasing, ensuring supply chain integration and long-term contracts.

Sustainability has become a key competitive differentiator. Major producers are investing in green steel technologies to lower carbon emissions during manufacturing. Digitalization of production processes and AI-driven quality control systems are improving yield and consistency. As demand for premium-grade electrical steel rises, companies that invest in innovation and efficiency are expected to gain a strong market position.

Company Insights

✦ ArcelorMittal
✦ China Baowu Steel Group Corporation
✦ POSCO
✦ Nippon Steel Corporation
✦ Voestalpine AG
✦ Jindal Steel and Power
✦ JFE Steel Corporation
✦ Tata Steel Limited
✦ NLMK Group
✦ SAIL (Steel Authority of India)
✦ Essar Steel
✦ MMK (Magnitogorsk Iron and Steel Works)
✦ Hyundai Steel
✦ Maithan Steel
✦ Sunflag Iron and Steel

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Future Outlook: Technology Advancements Shaping the Next Phase

The future of the electrical steel market will be defined by technological evolution and sustainability initiatives. Research into amorphous and high-silicon electrical steel is opening doors for next-generation transformers and ultra-efficient motors. These innovations will be critical in minimizing energy losses and improving system reliability in smart grids and renewable energy integration.

Moreover, as EV adoption accelerates globally, electrical steel producers will increasingly focus on developing specialized grades for traction motors. Lightweight materials with high magnetic flux density will play a vital role in enhancing EV performance. Combined with growing industrial automation and smart manufacturing systems, the electrical steel market is expected to remain on a robust growth trajectory. With a projected market size of US$73.3 Bn by 2032, electrical steel will continue to serve as the backbone of electrification and energy efficiency worldwide.

Conclusion: A Market Powering Global Electrification

The electrical steel market stands at the center of the global transition toward electrification and sustainability. From power grids and renewable energy plants to EV motors and industrial automation, its applications continue to expand across vital sectors. Driven by strong growth in energy infrastructure and electric mobility, the market is set to witness steady expansion through 2032. As manufacturers focus on innovation, efficiency, and sustainability, electrical steel will remain an indispensable material powering the next era of global industrial and energy transformation.

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