Electrical Steel Market Valued at USD 36.66 Billion in 2023—Strong Growth Ahead
Electrical Steel Market Poised for Strong Growth as Global Electrification Accelerates
The Electrical Steel Market, valued at US$ 36.66 billion in 2023, is projected to grow significantly, reaching an estimated US$ 62.43 billion by 2030 at a CAGR of 7.9 percent. This momentum is driven by rising demand across automotive, energy, manufacturing, and appliance industries, paired with the global shift toward electrification, cleaner mobility, and intelligent power infrastructure.
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Rising Demand for High-Performance Electrical Steel
Electrical steel, a specialized alloy made from iron and silicon, plays a critical role in power transmission and electromagnetic applications. Known also as silicon steel or laminate steel, its magnetic properties make it indispensable for producing transformers, generators, motors, inductors, and various electrical components.
With improving energy efficiency norms and rapid technological advancements, industries worldwide are increasingly adopting high-grade electrical steel. Two major categories, grain-oriented and non-grain-oriented electrical steel, continue to shape the market’s functional landscape. Grain-oriented electrical steel, engineered for enhanced magnetic permeability in a specific direction, is widely in demand for transformer production. Meanwhile, non-grain-oriented steel, with its consistent magnetic behavior in all directions, is essential for motors, electric vehicles, and rotating equipment.
Key Market Drivers Fueling Growth
The expansion of the global automobile sector remains one of the most influential factors propelling the electrical steel market. The steady year-on-year increase in vehicle production, combined with rising fuel efficiency requirements, has created a strong need for high-quality steel used in electric motors and energy-efficient automotive components.
The accelerating shift to electric and hybrid vehicles is further intensifying this demand. Enhanced magnetic flux, essential for achieving higher torque and improved motor performance, positions electrical steel as a core material in modern mobility solutions. As the world moves toward intelligent and sustainable transportation, electrical steel manufacturers are experiencing a surge in new opportunities.
Additionally, the rising need for industrial development and reliable power supply has boosted the installation of transformers and energy systems globally. Since electrical steel offers superior magnetic permeability, low hysteresis loss, and better energy conversion capabilities, it is becoming a preferred material in the expanding power sector.
Industry Trends Supporting Market Expansion
Autonomous driving, electric mobility, and urbanization trends are set to shape the future of the electrical steel market. A significant shift toward individual and efficient mobility solutions is expected, especially in developed regions. Studies show that personal mileage in Europe is forecasted to rise considerably due to autonomous vehicle adoption. Similar growth patterns are anticipated in the US and China, creating immense opportunities for electric motors and electrical steel components.
India’s rapidly expanding automotive sector provides another strong foundation for market growth. With over 35 automotive manufacturers and a multibillion-dollar economic contribution, the country represents a major consumption hub for electrical steel. Growing industrialization and increased use of electric motors in both commercial and residential environments further support market expansion.
Innovations in Electric Motors Enhancing Market Potential
Technological advancements in motor design and manufacturing are expected to shape the next wave of electrical steel demand. Innovations such as additive manufacturing, advanced cooling technologies, and improved magnet positioning enable higher efficiency and reliability in electric motors. Companies like Equipmake are transforming electric motor architecture using 3D printing and optimized cooling designs, making motors lighter, more efficient, and long-lasting.
These advancements align with the evolving requirements of electric vehicles, industrial machinery, and power generation equipment. As companies seek improved performance and lower energy consumption, the demand for advanced electrical steel grades is projected to grow.
Challenges: Raw Material Price Volatility
Despite the promising outlook, the electrical steel market faces significant challenges from fluctuating raw material prices. Steel production relies heavily on materials such as iron ore, coal, ferroalloys, and industrial gases, all of which are subject to price instability. Recent geopolitical issues, energy market fluctuations, and trade wars have contributed to unpredictable raw material costs. This directly affects steel manufacturing expenses and influences the pricing of grain-oriented and non-grain-oriented electrical steel products. Managing cost volatility remains a key challenge for manufacturers throughout the forecast period.
Segment Analysis: Types, Applications, and End-Use Industries
Based on type, grain-oriented electrical steel is expected to dominate the market due to its extensive use in transformer manufacturing. Its ability to support compact and efficient transformer designs makes it highly preferred for power transmission infrastructure.
In terms of application, the transformer segment is projected to grow at the fastest rate. Rising global electricity consumption and the development of smart grids and renewable energy installations have amplified the demand for high-efficiency transformers.
Among end-use industries, the energy sector is anticipated to lead the market due to increasing global electricity needs and expanding grid networks. The automotive industry also remains a key contributor, especially with growing interest in hybrid and electric vehicles.
Regional Insights
Asia Pacific is expected to dominate the global electrical steel market by 2030. The region’s strong presence of leading steel manufacturers such as ArcelorMittal, Tata Steel, POSCO, Nippon Steel, and Baosteel contributes significantly to its growth. Favorable labor availability, rapid urbanization, and expanding industrial infrastructure further enhance its leadership position.
North America is projected to grow at a steady pace, driven by increased focus on renewable energy systems, electric vehicle manufacturing, and the development of modern charging infrastructure. Investments by companies preparing to manufacture electric vehicles and components in the region support this growth trajectory.
Competitive Landscape
The market is characterized by the presence of global steel giants and technologically advanced players. Companies are investing in expanded production capacities, high-grade electrical steel innovation, and strategic collaborations to gain a competitive edge. Key players include:
Nippon Steel & Sumitomo Metal Corporation, Shandong Iron and Steel Group, JFE Steel Corporation, SAIL, ArcelorMittal, Baosteel Group, Voestalpine, JSW Steel, Tata Steel, and others.
Conclusion
The global electrical steel market is on a robust growth path, driven by rapid electrification, automotive innovations, and expanding power infrastructure. With strong demand from transformers, motors, and energy systems, the market is set for substantial expansion through 2030. As industries pursue energy efficiency and cleaner mobility, electrical steel will remain a pivotal material shaping the future of global manufacturing and technology.
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