Electrical Steels Sales Market Outlook

The global electrical steel market is poised for significant growth, projected to reach approximately USD 40 billion by 2035, with a compound annual growth rate (CAGR) of around 6.7% during the forecast period of 2025 to 2035. This growth is driven primarily by the increasing demand from the energy sector, particularly for transformers and motors, which are essential components for efficient electricity transmission and distribution. The rising need for energy-efficient solutions in various applications, along with a growing emphasis on renewable energy sources, is further propelling the market's expansion. Additionally, advancements in manufacturing technologies that enhance the performance of electrical steel are contributing to its wider adoption across industries. The evolving automotive sector, with its shift towards electric vehicles (EVs), is also expected to create substantial opportunities for the electrical steel market.

Growth Factor of the Market

The growth of the electrical steel market is significantly influenced by the unprecedented demand for energy-efficient electrical components. As urbanization and industrialization continue to proliferate globally, the need for robust power generation systems becomes paramount. Modern electrical devices require high-performance materials such as electrical steel, which are critical for reducing energy losses during operation. Additionally, government regulations aimed at promoting the usage of renewable energy sources and reducing carbon emissions are driving investments in smart grid technologies, which enhance the demand for transformers and motors made from electrical steel. The automotive industry's transition towards electric vehicles amplifies the need for high-quality electrical steel, catering to the motors and other components crucial for EV efficiency. Moreover, the ongoing advancements in manufacturing processes that allow for the production of thinner, more efficient electrical steels are set to further enhance market growth.

Key Highlights of the Market

• The global electrical steel market is expected to reach approximately USD 40 billion by 2035.
• Projected CAGR of around 6.7% during the forecast period from 2025 to 2035.
• Significant growth driven by the increasing demand for energy-efficient applications.
• Rising investments in renewable energy and smart grid technologies.
• The automotive sector's shift towards electric vehicles is boosting demand for electrical steel.

By Product Type

Grain-Oriented Electrical Steel:

Grain-oriented electrical steel (GOES) is primarily used in the manufacturing of transformer cores and other magnetic devices due to its superior magnetic properties. This type of steel is characterized by its high permeability and low iron loss, which are essential for maximizing energy efficiency in electrical applications. The demand for grain-oriented electrical steel is largely driven by the growing power generation and transmission industries, where efficiency is paramount. Additionally, advancements in processing technologies have improved the performance of GOES, facilitating its use in high-efficiency transformers. As countries worldwide aim to enhance their electrical grid systems, the demand for grain-oriented electrical steel is anticipated to see a significant upswing over the next decade, contributing to the overall growth of the electrical steels market.

Non-Grain Oriented Electrical Steel:

Non-grain oriented electrical steel (NGOES) is widely utilized across various applications, including motors, generators, and inductors, thanks to its isotropic magnetic properties that provide efficient performance in multi-directional magnetic fields. The increasing use of NGOES in the manufacturing of electric motors, particularly in the automotive sector, underpins its demand as vehicles transition towards electrification. Furthermore, the growing trend of miniaturization in electrical components has led to a preference for non-grain oriented electrical steel, as it can be produced in thinner gauges while maintaining performance. As technology evolves and the focus shifts towards energy-efficient solutions, the non-grain oriented electrical steel segment is expected to experience robust growth, complementing the demand from the broader electrical steel market.

By Application

Transformers:

Transformers represent one of the largest applications for electrical steel, as they are critical components in power generation and distribution systems. The use of electrical steel in transformers enhances their efficiency by minimizing energy losses, which is crucial for sustainable electricity transmission. The increasing global demand for electricity, driven by population growth and industrial expansion, is expected to propel the transformer segment significantly. Moreover, the need to upgrade aging infrastructure and integrate renewable energy sources necessitates the deployment of efficient transformers, which further drives the demand for high-quality electrical steels. As innovation in transformer design continues, particularly with the introduction of smart transformers, electrical steels will play an essential role in ensuring optimal performance and reduced energy consumption.

Motors:

The application of electrical steel in motors is witnessing substantial growth as the automotive industry shifts towards electric vehicles and more efficient motor designs. Motors require high-performance materials to reduce energy losses during operation, and electrical steel is specifically engineered to provide this advantage. The increasing emphasis on energy efficiency and performance improvement in electric motors is bolstering the demand for both grain-oriented and non-grain oriented electrical steels. Additionally, advancements in motor technology that require lighter and more efficient materials are also driving the growth of the electrical steel market in this application. The move towards automation and smart technologies in various industrial sectors further emphasizes the importance of efficient motor functions, thus promoting the use of electrical steels.

Inductors:

Inductors, commonly used in electrical circuits to store energy in magnetic fields, require materials that can provide optimal performance under alternating current conditions. The use of electrical steel in inductors is increasing due to its favorable magnetic properties, which contribute to improved efficiency and reduced energy loss. As technology continues to evolve, especially in sectors such as telecommunications and consumer electronics, the demand for high-performance inductors will rise, subsequently driving the need for electrical steel. Additionally, with the expansion of smart devices and electronic components, the role of electrical steel in inductors is becoming increasingly significant as manufacturers strive to enhance the efficiency and reliability of their products.

Generators:

Generators are essential for converting mechanical energy into electrical energy, and electrical steel plays a critical role in optimizing their performance. The demand for electrical steel in generators is primarily driven by the growth in the renewable energy sector, particularly wind and hydroelectric power generation. These generators require high-quality electrical steel to ensure efficiency and longevity, as energy losses can significantly impact overall performance. The increasing focus on sustainable energy sources and the need for reliable power generation solutions are propelling the demand for electrical steels in generator applications. Furthermore, as generator technology advances with the incorporation of smart features, the reliance on high-performance electrical steel is expected to continue growing, enhancing the overall market for electrical steels.

By User

Automotive:

The automotive sector is a burgeoning user of electrical steel, particularly with the rise of electric vehicles (EVs) and hybrid models. Electrical steels are integral to the manufacturing of motors used in EVs, where efficiency and performance directly impact range and energy consumption. As automotive manufacturers increasingly embrace electrification, the demand for high-quality electrical steel to produce powerful, efficient motors is expected to rise. Additionally, advancements in technologies that allow for the production of lighter and more efficient electrical steel further enhance the appeal of these materials in automotive applications. The automotive industryÔÇÖs transition towards sustainability will continue to drive the market for electrical steel, as manufacturers strive to meet stringent efficiency standards while improving vehicle performance.

Energy:

The energy sector is one of the largest consumers of electrical steel, particularly for applications in transformers and generators, which are critical for efficient power generation and transmission. The increasing global need for reliable and efficient energy sources is propelling the demand for electrical steels. As countries invest in upgrading their electrical infrastructure and integrating renewable energy sources, the reliance on efficient electrical components becomes paramount. The energy sector's focus on sustainability and reducing carbon emissions also drives the demand for high-performance electrical steels that minimize losses and improve overall efficiency. As the energy landscape evolves with a greater emphasis on renewable sources, the electrical steel market will continue to expand in this domain.

Manufacturing:

The manufacturing sector utilizes electrical steel in various applications, including motors, generators, and inductors. With the rise of automation and smart manufacturing processes, there is an increasing demand for efficient electrical components that can enhance productivity while minimizing energy consumption. The manufacturing industry's push towards energy-efficient solutions not only aligns with global sustainability goals but also drives the demand for electrical steel. Additionally, as industries adopt advanced technologies and equipment that require high-performance magnets and inductors, the need for quality electrical steel will grow. The ongoing trend of modernization in manufacturing facilities ensures that the electrical steel market will remain robust in this sector.

Household Appliances:

The household appliances segment is steadily increasing its utilization of electrical steel in various products, including refrigerators, air conditioners, and washing machines. As appliances become more energy-efficient and technologically advanced, the need for high-performance electrical materials becomes essential. Electrical steel plays a crucial role in the motors and magnetic components of these appliances, impacting their energy consumption and operational efficiency. Furthermore, the growing consumer awareness regarding energy savings and eco-friendly products is driving manufacturers to invest in advanced electrical steels. As the household appliance market continues to innovate and incorporate smart technology, the demand for electrical steel will inevitably rise, supporting the overall market growth.

By Region

The electrical steel market exhibits varying dynamics across different regions, driven by unique industrial demands and technological advancements. In North America, the market is projected to witness steady growth, estimated to reach approximately USD 10 billion by 2035, with a CAGR of around 5.5%. This growth is propelled by the increasing investments in the power generation sector and the ongoing shift towards renewable energy sources. Furthermore, the automotive industry's push towards electric vehicles in the region is expected to significantly enhance demand for electrical steel. In contrast, Asia Pacific is anticipated to dominate the market, accounting for over 40% of the global share by 2035, with a forecasted CAGR of 7.5%. This region's rapid industrialization, urbanization, and strong government support for renewable energy initiatives are substantial growth drivers.

Europe is also a crucial market for electrical steel, with estimates suggesting it will reach around USD 9 billion by 2035, supported by stringent energy efficiency regulations and a strong automotive sector transitioning to electric vehicles. The Middle East & Africa are projected to grow at moderate rates due to increasing investments in energy infrastructure and industrial sectors. Meanwhile, Latin America presents growth opportunities as countries upgrade their electrical grids and embrace renewable energy technologies. Overall, the regional analysis indicates a diverse landscape with varying growth rates, influenced by government policies, technological advancements, and industrial demands.

Opportunities

The electrical steel market is rife with opportunities, particularly driven by the global shift towards sustainability and energy efficiency. As nations strive to meet their climate goals, investments in renewable energy sources such as wind and solar are expected to surge. This transition necessitates the development of more efficient electrical components, including transformers and motors that utilize electrical steel to minimize energy losses. Additionally, the automotive industry's push for electric vehicles presents a substantial growth opportunity. With more vehicle manufacturers investing in electric and hybrid models, the demand for electrical steel used in motors and other components will likely escalate. Companies that innovate in manufacturing processes to create lighter and more energy-efficient electrical steels will further position themselves favorably in this expanding market.

Moreover, the ongoing advancements in manufacturing technology, which allow for the production of thinner and higher-performance electrical steels, are opening new avenues for application across various industries. As industries increasingly automate and adopt smart technologies, there will be a greater demand for reliable and efficient electrical components. Furthermore, international collaborations and partnerships in research and development can fuel innovation in the electrical steel sector. The growing emphasis on creating sustainable and energy-efficient solutions presents a ripe landscape for companies to explore new products, applications, and technologies, thereby enhancing their market presence and driving overall growth.

Threats

Despite the promising growth prospects for the electrical steel market, several threats could impede its progress. One of the primary concerns stems from fluctuating raw material prices, particularly for steel and alloy components, which could impact profit margins for manufacturers. Any instability in the steel supply chain can lead to increased production costs, ultimately affecting the pricing strategies of electrical steel products. Additionally, the market is subject to intense competition, not only from established players but also from new entrants looking to capitalize on the growing demand. This heightened competition could lead to price wars and reduced profitability, forcing companies to innovate constantly to maintain their market position.

Furthermore, regulatory challenges may pose a threat to market growth as governments around the world implement stricter environmental regulations. Adapting to these regulations can require significant investment and changes in manufacturing processes for electrical steel producers. The rapid pace of technological advancements also presents a challenge, as companies must keep up with evolving customer expectations and industry standards. Failure to innovate or adapt could result in reduced market share or obsolescence. These threats necessitate strategic planning and agility among industry players to navigate the complex landscape of the electrical steel market successfully.

Competitor Outlook

• ArcelorMittal
• AK Steel Holding Corporation
• Thyssenkrupp AG
• Nippon Steel Corporation
• POSCO
• JFE Steel Corporation
• United States Steel Corporation
• Sheet Steel Alliance
• CSC Steel Holding Co., Ltd.
• Voestalpine AG
• Magneti Marelli S.p.A.
• Steel Authority of India Limited (SAIL)
• China Steel Corporation
• Severstal
• Wuyang Iron and Steel Co., Ltd.

The competitive landscape of the electrical steel market is characterized by the presence of several established players as well as emerging companies striving to capture market share. Key statistics reveal that major companies such as ArcelorMittal and Thyssenkrupp AG dominate the market due to their extensive product portfolios and technological capabilities. These companies invest significantly in research and development to innovate and enhance the performance of their electrical steel offerings. Furthermore, strategic partnerships and collaborations with end-users help these companies stay ahead of the competition by aligning their products with industry needs and trends. With sustainability becoming a focal point for many manufacturers, companies that prioritize eco-friendly practices in their production processes are well-positioned to attract environmentally-conscious customers and stakeholders.

ArcelorMittal, being one of the largest steel producers globally, has a strong foothold in the electrical steel market, offering a diverse range of high-performance solutions for various applications. The company's emphasis on innovation and sustainability has led to the development of advanced electrical steel grades that meet the growing demand for energy-efficient technologies. Similarly, Thyssenkrupp AG has a significant presence in the electrical steels sector, focusing on producing high-grade materials that cater to the automotive and energy industries. Their commitment to research and development has resulted in cutting-edge products that enhance the performance of electrical components while reducing environmental impact.

Additionally, emerging players in the electrical steel market are leveraging technology and advancements in manufacturing processes to carve out a niche in this competitive landscape. Companies such as JFE Steel Corporation and POSCO are actively investing in the development of innovative electrical steel products tailored to meet the evolving needs of end-users. These companies focus on improving the efficiency and performance of their materials, ensuring they remain competitive in a rapidly changing market. Overall, the electrical steel market's competitive outlook reflects a dynamic environment where established players and new entrants alike are striving to create value through innovation, sustainability, and strategic market positioning.