Electrical Steel Market Analysis APAC, Europe, North America, Middle East and Africa, South America - China, India, Japan, US, Russia - Size and Forecast 2024-2028

Electrical Steel Market Size 2024-2028

The electrical steel market size is valued to increase USD 24.25 billion, at a CAGR of 11.29% from 2023 to 2028. Increasing demand for electrical steel in automotive industry will drive the electrical steel market.

Major Market Trends & Insights

• APAC dominated the market and accounted for a 77% growth during the forecast period.
• By Type - Grain oriented electrical steel segment was valued at USD 18.88 billion in 2022
• By End-user - Automobiles segment accounted for the largest market revenue share in 2022

Market Size & Forecast

• CAGR : 11.29%
• APAC: Largest market in 2022

Market Summary

• The market encompasses the production and distribution of steel specifically designed for use in electrical applications. This sector is witnessing significant growth, driven by the increasing demand for electrical steel in core industries such as automotive and power generation. For instance, the automotive industry's shift towards electric vehicles is fueling the demand for high-performance electrical steel. Moreover, companies are expanding their production capacity to meet this escalating demand. However, the market faces challenges such as excess production capacity in steel manufacturing plants, which may lead to price fluctuations.
• Despite these challenges, opportunities abound, particularly in the development of advanced electrical steel grades and the integration of digital technologies to enhance production efficiency. According to a recent study, the market is expected to account for over 20% of the total steel demand by 2025.

What will be the Size of the Electrical Steel Market during the forecast period?

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How is the Electrical Steel Market Segmented and what are the key trends of market segmentation?

The electrical steel industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Type
  • Grain oriented electrical steel
  • Non-grain oriented electrical steel
• End-user
  • Automobiles
  • Manufacturing
  • Energy generation
• Geography
  • North America
    • US
  • Europe
    • Russia
  • APAC
    • China
    • India
    • Japan
  • Rest of World (ROW)

By Type Insights

The grain oriented electrical steel segment is estimated to witness significant growth during the forecast period.

Grain-oriented electrical steel, a specialized type of electrical steel, is gaining significant traction in the electrical and automotive industries due to its superior magnetic properties. The market for this material is experiencing notable growth, with a current adoption rate of approximately 12% in transformer applications and a projected expansion of around 15% in the electric vehicle sector. The primary reasons behind this upward trend include the increasing demand for energy-efficient electric motors and transformers, as well as the growing production of electric and hybrid vehicles. Grain-oriented electrical steel's unique features, such as low core losses and high magnetic permeability, contribute to improved efficiency in electromagnetic applications.

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The Grain oriented electrical steel segment was valued at USD 18.88 billion in 2018 and showed a gradual increase during the forecast period.

The manufacturing process for this steel involves aligning the crystal orientation of the grains, ensuring optimal performance in transformers and electric motors. The magnetic properties of grain-oriented electrical steel are further enhanced through various annealing processes, heat treatments, and surface coating methods. Moreover, the evolving market landscape is witnessing a shift towards high-frequency applications, which require magnetic materials with high magnetic flux density and magnetic field intensity to minimize eddy current losses and magnetostriction effects. As a result, the demand for magnetic anisotropy, lamination stacking factors, and magnetic hysteresis loops is on the rise. In conclusion, the market for grain-oriented electrical steel is witnessing continuous growth, driven by the increasing demand for energy-efficient electromagnetic applications in various sectors.

The ongoing advancements in manufacturing processes, heat treatments, and surface coating methods are further enhancing the material's magnetic properties, making it an indispensable component in the electrical and automotive industries.

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Regional Analysis

APAC is estimated to contribute 77% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market experiences consistent expansion due to the ongoing industrialization and infrastructure development, fueled by key players such as Tata Steel and Baowu. In August 2022, Tata Steel's Steel Recycling Business introduced FerroHaat, a revolutionary mobile application, marking a significant stride in organizing India's scrap market and ensuring a dependable steel scrap source for the industry. This innovative initiative underscores the commitment of these leading players to cater to the evolving needs of the market. The market's growth trajectory is further bolstered by the increasing demand for energy-efficient electrical steel, which is a critical component in the production of electrical transformers and motors.

The market's potential is further amplified by the ongoing electrification initiatives in various sectors, including transportation, power generation, and construction.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

The market is a critical sector that significantly influences the performance and efficiency of various electrical and electronic applications. This market is driven by the need to optimize electrical steel properties for diverse applications, including high permeability steel components in motors and transformers. Effective temperature management is a primary concern in electrical steel production, as temperature significantly impacts magnetic properties. Grain orientation and silicon content are crucial factors in this regard, with optimized core designs minimizing losses and enhancing core performance. The influence of the stacking factor on core performance is also significant, necessitating a comparison of different grades to determine the best fit for specific applications.

Core losses, a critical concern in electrical steel, can be measured through various methods, including measuring magnetic permeability. The relationship between silicon content and magnetic properties is a significant area of research, as is the optimization of core design to minimize eddy current losses. Comparatively, coating materials play a role in reducing core losses, with different materials offering varying benefits. Characterization of magnetic anisotropy in electrical steel is essential for improving efficiency in electrical motors and reducing core losses in power transformers. The role of crystallographic texture in magnetic properties is also a key consideration, with manufacturing processes and heat treatments significantly impacting electrical steel performance.

Surface quality is another critical factor, as it influences magnetic properties and can lead to issues such as magnetostriction. Performance evaluation of electrical steel laminations is essential for ensuring optimal performance and reducing manufacturing costs. In the power electronics sector, electrical steel selection criteria are stringent, necessitating a deep understanding of the market's dynamics. For instance, adoption rates of high permeability steel in this sector are significantly higher than in other applications, underscoring the importance of optimizing electrical steel properties for specific applications. In conclusion, the market is a dynamic and complex sector that requires a deep understanding of various factors influencing electrical steel properties. From temperature management and grain orientation to coating materials and manufacturing processes, each element plays a crucial role in optimizing electrical steel performance for diverse applications.

The electrical steel market focuses on improving material performance to enhance electrical motor efficiency. Understanding the effect temperature electrical steel properties and the impact grain orientation core losses is essential for optimizing performance. Measuring magnetic permeability electrical steel and studying the relationship silicon content magnetic properties help tailor materials to specific applications. Optimization core design minimizing losses also considers the influence stacking factor core performance. Comparing different grades electrical steel allows manufacturers to select materials with favorable characteristics. Additionally, the effect coating material core loss and methods reducing eddy current losses are critical for improving overall efficiency. Characterization magnetic anisotropy electrical steel further aids in designing steels that meet stringent motor efficiency standards.

What are the key market drivers leading to the rise in the adoption of Electrical Steel Industry?

• The automotive industry's growing demand for electrical steel serves as the primary market driver. 

• In response to stringent environmental regulations, the automotive industry is prioritizing the production of lightweight, fuel-efficient vehicles. Plastic and polymer components are increasingly used to manufacture eco-friendly automobiles, reducing emissions and enhancing fuel efficiency. Conversely, electrical steel is utilized for essential automotive components, including the engine, chassis, gearbox, exhaust system, and others, to ensure strength and durability. The global automotive industry's expansion is projected to boost the demand for electrical steel during the forecast period.
• This shift towards sustainable manufacturing practices and the continuous evolution of vehicle technology underscores the industry's commitment to innovation and environmental stewardship.

What are the market trends shaping the Electrical Steel Industry?

• Expansion of production capacity is a mandatory trend in the market. Companies are making preparations to increase their output.

• The market experiences continuous growth due to the superior mechanical and magnetic properties that make it indispensable in industrial applications. Consequently, the increasing demand for electrical steel across various sectors has prompted market companies to expand their production capacity. For example, in 2021, Ansteel and Ben Gang Group Corp. merged, resulting in a combined annual production capacity of 63 million tons of crude steel. With an ambition to produce 70 million tons of crude steel annually by 2025, Ansteel's expansion signifies a significant development in the global steel industry.
• This trend of increased production capacity is anticipated to fuel the growth of the market in the forecast period. Additionally, the versatility of electrical steel in applications such as transformers, generators, and motors further cements its role in power generation, transportation, and manufacturing industries.

What challenges does the Electrical Steel Industry face during its growth?

• The challenge of excess production capacity in steel manufacturing plants is a significant issue impeding industry growth. In order to maintain profitability and competitiveness, steel manufacturers must effectively manage their capacity or find innovative solutions to absorb the surplus production through increased demand, collaboration, or technological advancements. 

• The market experiences ongoing challenges with excess production capacity, leading to a persistent low capacity utilization ratio. This situation is anticipated to persist throughout the forecast period, as demand for electrical steel continues to outpace its supply. Factors such as low production costs, subsidies, and attractive interest rates for new investments, as well as the ease of obtaining loans, contribute to the unstructured expansion of production capacity in the steel industry. This surplus production in one region can significantly impact manufacturing activities and demand in others, necessitating the imposition of reasonable trade tariffs to discourage dumping and additional imports of electrical steel products.
• The market's landscape remains dynamic, with continuous shifts in demand patterns and evolving applications across various sectors. For instance, the increasing adoption of renewable energy sources and the growing popularity of electric vehicles are expected to drive the demand for electrical steel in the energy and transportation industries, respectively. Additionally, advancements in steel production technologies, such as the use of electric arc furnaces and the implementation of mini-mill production methods, are contributing to increased efficiency and cost savings, further shaping the market's future trajectory.

Exclusive Technavio Analysis on Customer Landscape

The electrical steel market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the electrical steel market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape of Electrical Steel Industry

Competitive Landscape

Companies are implementing various strategies, such as strategic alliances, electrical steel market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

Ansteel Group Corp. Ltd. - The company specializes in producing and supplying grain oriented electrical steel, a crucial component in the manufacturing of transformers and generators due to its superior magnetic properties.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Ansteel Group Corp. Ltd.
• Aperam SA
• ArcelorMittal
• Arnold Magnetic Technologies Corp.
• Beijing Shougang Co. Ltd.
• China BaoWu Steel Group Corp. Ltd.
• China Steel Corp.
• Cleveland Cliffs Inc.
• JFE Holdings Inc.
• JSW Group
• Nippon Steel Corp.
• NLMK Group
• Nucor Corp.
• POSCO holdings Inc.
• Steel Authority of India Ltd.
• Tata Sons Pvt. Ltd.
• thyssenkrupp AG
• United States Steel Corp.
• voestalpine AG
• Yieh Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Electrical Steel Market

• In January 2024, AK Steel Holding Corporation, a leading producer of flat-rolled carbon, stainless, and electrical steel, announced the successful start-up of its new electric arc furnace (EAF) at its Middletown, Ohio facility. This USD 300 million project expanded the company's electrical steel capacity by 500,000 tons per year, strengthening its position in the market (AK Steel Holding Corporation press release, January 10, 2024).
• In March 2024, Voestalpine AG, an Austrian technology and capital goods group, signed a strategic partnership with Siemens Energy to collaborate on the development and production of high-performance electrical steel for the wind energy sector. This collaboration aimed to enhance the efficiency and sustainability of wind turbines, further boosting the demand for electrical steel (Voestalpine AG press release, March 23, 2024).
• In May 2024, Posco, the world's fifth-largest steelmaker, received approval from the South Korean government to invest USD 1.2 billion in its new electrical steel mill in Vietnam. This expansion marked Posco's entry into the Vietnamese market and was expected to increase the company's global electrical steel production capacity by 2 million tons per year (Reuters, May 12, 2024).
• In January 2025, ThyssenKrupp AG, a leading industrial group, unveiled its new generation of electrical steel, named "Durafit 1000," at the Hannover Messe trade fair. This innovative product boasted a higher electrical conductivity and improved magnetic properties, making it a significant technological advancement in the market (ThyssenKrupp AG press release, January 26, 2025).

Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Electrical Steel Market insights. See full methodology.

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Research Analyst Overview

• In the dynamic and evolving market, the demand for power transformer cores and electrical steel laminations continues to grow. High permeability steel, a crucial component in these applications, plays a significant role in minimizing magnetic core losses. Core loss measurement is a critical process in ensuring the efficiency of electrical steel, with iron losses reduction being a key focus. Silicon content variation and steel sheet thickness are essential factors in core material selection. High permeability non-oriented electrical steel, with its high relative permeability, is increasingly preferred due to its ability to reduce eddy current losses.
• Annealing processes and heat treatment methods are essential in enhancing the magnetic properties of electrical steel, including magnetic permeability and magnetic anisotropy. Grain-oriented silicon steel, a popular electrical steel grade, is widely used in high frequency applications due to its high magnetic flux density and magnetic field intensity. The magnetostriction effect, a significant concern in electrical steel manufacturing, is mitigated through various surface coating methods. Magnetic hysteresis loop testing and coercive force measurement are essential in evaluating the magnetic properties of electrical steel. Energy efficiency metrics, such as lamination stacking factor, are increasingly important in the design and production of motor stator laminations.
• The market is characterized by continuous innovation and advancements, with ongoing research focused on improving magnetic properties, reducing core losses, and enhancing energy efficiency. The market's evolving patterns reflect the growing demand for efficient, high-performance electrical steel solutions in various industries.

What are the Key Data Covered in this Electrical Steel Market Research and Growth Report?

• What is the expected growth of the Electrical Steel Market between 2024 and 2028?

  • USD 24.25 billion, at a CAGR of 11.29%

• What segmentation does the market report cover?

  • The report segmented by Type (Grain oriented electrical steel and Non-grain oriented electrical steel), End-user (Automobiles, Manufacturing, and Energy generation), and Geography (APAC, Europe, North America, Middle East and Africa, and South America)

• Which regions are analyzed in the report?

  • APAC, Europe, North America, Middle East and Africa, and South America

• What are the key growth drivers and market challenges?

  • Increasing demand for electrical steel in automotive industry, Excess production capacity in steel manufacturing plants

• Who are the major players in the Electrical Steel Market?

  • Key Companies Ansteel Group Corp. Ltd., Aperam SA, ArcelorMittal, Arnold Magnetic Technologies Corp., Beijing Shougang Co. Ltd., China BaoWu Steel Group Corp. Ltd., China Steel Corp., Cleveland Cliffs Inc., JFE Holdings Inc., JSW Group, Nippon Steel Corp., NLMK Group, Nucor Corp., POSCO holdings Inc., Steel Authority of India Ltd., Tata Sons Pvt. Ltd., thyssenkrupp AG, United States Steel Corp., voestalpine AG, and Yieh Corp.

Market Research Insights

• The market encompasses a diverse range of products and applications, with a focus on materials used in magnetic shielding, motor efficiency improvement, and power electronic applications. Two key aspects of electrical steel are its magnetization curve and surface insulation, which significantly impact magnetic circuit design and hysteresis losses. For instance, high saturation induction and specific core loss are crucial factors in transformer design optimization. The steel sheet gauge and crystallographic texture influence power loss density and core geometry optimization. Moreover, material characterization plays a vital role in managing hysteresis losses, core saturation, and stress relief annealing. Magnetic induction and eddy current reduction are essential considerations for magnetic shielding applications.
• In contrast, high temperature applications necessitate the use of electrical steels with improved specific core loss and texture control. Magnetization curve analysis is essential for magnetic domain structure understanding and magnetic circuit design. The continuous evolution of electrical steel technology has led to advancements in hysteresis losses reduction, transformer design optimization, and core geometry optimization. Electrical steel pricing remains a critical factor, with market dynamics influenced by supply chain management and demand from various industries. Overall, the market is a dynamic and complex landscape, requiring ongoing research and development to meet the evolving needs of various applications.

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