Electrical Steel Market Size, Share, Trends and Forecast 2026-2034
The global electrical steel market size was valued at USD 44.56 billion in 2025 and is projected to grow from USD 47.46 billion in 2026 to USD 78.54 billion by 2034, registering a CAGR of 6.5% during the forecast period from 2026 to 2034. Asia Pacific dominated the electrical steel market with a 46.8% market share in 2025, while Europe is expected to be the fastest-growing regional market with a CAGR of 8.4%.
Electrical steel comprises specialized steel alloys engineered to provide high magnetic permeability and low core losses in electromagnetic equipment. It is widely used in transformers, electric motors, generators, inductors, and power transmission systems. Increasing electricity demand, grid modernization, renewable energy integration, electric vehicle adoption, and demand for energy-efficient electrical infrastructure are supporting market growth.
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Electrical Steel Market Overview
The electrical steel market is expanding as power infrastructure, electric mobility, and energy-efficient electrical equipment continue to increase demand for high-performance magnetic materials. Electrical steel plays an important role in improving the efficiency of transformers, motors, generators, and other electromagnetic equipment by reducing energy losses.
The market was valued at USD 44.56 billion in 2025 and is expected to reach USD 78.54 billion by 2034. The forecast period from 2026 to 2034 is expected to be characterized by growing demand for efficient electrical equipment, modernization of aging grid infrastructure, and expanding applications in industrial and automotive systems.
Electrical Steel Market Size and Forecast
The global electrical steel market is projected to increase from USD 47.46 billion in 2026 to USD 78.54 billion by 2034, representing a CAGR of 6.5%.
Key market indicators include:
2025 market size: USD 44.56 billion
2026 market size: USD 47.46 billion
2034 projected market size: USD 78.54 billion
CAGR, 2026-2034: 6.5%
Base year: 2025
Historical period: 2022-2024
Forecast period: 2026-2034
The market's growth outlook is supported by increasing demand for transformers, motors, generators, and other electrical equipment across energy, industrial, automotive, and household applications.
Electrical Steel Market Trends
Development of Silicon-Gradient Electrical Steel
The development of silicon-gradient electrical steel is emerging as an important trend in the market. Demand for higher efficiency and lower high-frequency iron losses is encouraging the development of silicon-gradient compositions. Higher silicon concentration near the surface can reduce eddy-current losses while retaining stronger magnetic flux characteristics in the inner layer.
JFE Steel's JNRF silicon-gradient sheet was developed for high-speed motors, with test motors using the material achieving more than 95% efficiency at 10,000 rpm and above.
Shift Toward Ultra-Thin Electrical Steel
The growing requirement for higher rotational speeds and compact traction motors is supporting demand for ultra-thin electrical steel laminations. Thinner sheets can reduce eddy-current losses at elevated excitation frequencies, supporting applications in high-speed motors. Electrical steel as thin as 0.05 mm is commercially available for high-frequency applications.
Electrical Steel Market Drivers
Replacement of Aging Transformers and Grid Equipment
The replacement of aging transformers and grid equipment is driving demand for electrical steel as utilities modernize transmission and distribution assets. Older transformers require replacement or refurbishment, creating recurring demand for transformer cores and high-quality electrical steel.
Grid modernization is therefore increasing procurement requirements from transformer manufacturers and supporting production capacity throughout the electrical steel supply chain.
Rising Demand for Energy-Efficient Transformers
Demand for energy-efficient transformers is also increasing the use of electrical steel with lower core losses. Utilities and industrial users are seeking materials that can reduce energy losses during power transmission and distribution.
Low-loss electrical steel is used in transformer cores to reduce no-load energy losses during continuous operation. The growing adoption of efficient transformers is consequently supporting demand for higher-performance electrical steel.
Electrical Steel Market Challenges
High Production Costs and Raw Material Price Volatility
Electrical steel manufacturing involves energy-intensive processing, specialized equipment, strict quality controls, and advanced production techniques. These factors can increase manufacturing costs, raise product prices, and limit competitiveness in cost-sensitive applications.
Volatility in the prices of iron, alloying elements, and other production inputs can also create uncertainty in manufacturing costs. Unstable input prices can affect profit margins, complicate product pricing, delay purchasing decisions, and restrict market expansion.
Limited Availability and Long Qualification Cycles
Limited availability of specialized grain-oriented electrical steel can constrain transformer production and delay downstream orders. Electrical steel used in transformers, motors, and generators must also satisfy stringent magnetic-performance requirements.
As a result, qualification of new grades and suppliers can be time-consuming. These extended testing and approval cycles can slow the commercial adoption of advanced electrical steel products.
Electrical Steel Market Opportunities
Electrical Steel for Industrial Motors and Drives
The development of electrical steel for industrial motors and drives represents an important growth opportunity. Motor manufacturers, industrial equipment producers, and electrical steel suppliers can target demand from pumps, compressors, HVAC systems, and factory machinery.
Specialized electrical steel grades supplied to motor and drive manufacturers can create additional revenue opportunities, while long-term supply agreements can support recurring material sales.
Electrical Steel for Electric Vehicle Motors
The expansion of electric vehicle applications is creating opportunities for electrical steel suppliers and traction-motor producers. High-efficiency electric drivetrains require magnetic materials capable of supporting efficient motor operation.
Companies supplying customized electrical steel for EV motor applications can benefit from automotive supply contracts and increasing production volumes.
Electrical Steel Market Segmentation
By Type
The non-grain-oriented segment accounted for 64.2% of the electrical steel market in 2025, making it the leading type segment. Its extensive use in rotating electrical equipment such as motors and generators supports its market position.
The non-grain-oriented segment is expected to grow at a CAGR of 7.7% from 2026 to 2034, driven by increasing demand for efficient electric motors and expanding electrical equipment applications across industrial and mobility sectors.
By Applications
The transformers segment accounted for 34.8% of the market in 2025. Electrical steel is used in transformer cores to reduce energy losses and improve magnetic efficiency.
The motors segment is expected to be the fastest-growing application segment, registering a CAGR of 8.1% from 2026 to 2034. Growth is supported by increasing demand for energy-efficient motors and expanding electrification across industrial and mobility applications.
By End User
The energy & power segment accounted for 31.4% of the market in 2025, supported by extensive electrical steel use in transformers, power equipment, and electricity infrastructure.
The automotive segment is expected to grow at a CAGR of 8.4% during 2026-2034, driven by increasing vehicle electrification and rising demand for efficient electric motors and electrical components.
Electrical Steel Market Regional Analysis
Asia Pacific Electrical Steel Market
Asia Pacific dominated the global electrical steel market with a 46.8% share in 2025. The region is supported by increasing electricity demand and investment in power infrastructure, transformers, motors, and other electrical equipment.
China, India, Japan, and South Korea represent important markets within the region. China is positioned for stronger demand as it develops its power-system framework, integrates new energy capacity into the grid, and expands electric vehicle infrastructure. India is supported by growing requirements for CRGO electrical steel and planned domestic production capacity.
Europe Electrical Steel Market
Europe is expected to be the fastest-growing regional market, with a CAGR of 8.4% from 2026 to 2034. Grid modernization, renewable-energy integration, electric vehicle adoption, and electricity infrastructure expansion are supporting demand for electrical steel.
The U.K., Germany, and France are key markets, with planned investments in electricity transmission networks and rising electricity demand supporting requirements for transformers and other electrical equipment.
North America Electrical Steel Market
North America accounted for 20.4% of the regional share in 2025. The market is supported by rising power-system investment and increasing demand for transformers, generators, and grid equipment.
The United States is expected to benefit from increasing electricity consumption and investment in power infrastructure, while Canada's growing electricity requirements are expected to support demand for transmission equipment, transformers, and electrical steel.
Key Players in the Electrical Steel Market
The electrical steel market is moderately fragmented, with integrated steel producers, specialty steel manufacturers, electrical steel producers, and regional suppliers competing across power generation, transformers, motors, generators, and other applications.
Key players include:
Cogent Power
Nippon Steel & Sumitomo Metal Corporation
POSCO
Baosteel
China Baowu Steel Group Corporation Limited
Ansteel Group Corporation Limited
United States Steel Corporation
ArcelorMittal
Other companies active in the market include Tata Steel Limited, SAIL, Voestalpine Group, JFE Steel Corporation, Jindal Steel and Power Limited, and Essar Steel.
Companies compete based on magnetic properties, steel grade quality, production capacity, product consistency, energy efficiency, technical expertise, manufacturing technology, and supply capabilities.
Conclusion
The electrical steel market is projected to grow from USD 47.46 billion in 2026 to USD 78.54 billion by 2034 at a CAGR of 6.5%. Growth is being supported by replacement of aging transformers and grid equipment, rising demand for energy-efficient transformers, industrial motor applications, electric vehicle motors, and expanding electricity infrastructure.
Asia Pacific remains the dominant regional market, accounting for 46.8% of the market in 2025, while Europe is expected to record the fastest growth with a CAGR of 8.4%. Non-grain-oriented electrical steel leads the type segment, transformers represent the largest application segment, and energy & power is the leading end-user segment.
The development of silicon-gradient electrical steel, ultra-thin laminations, specialized motor grades, and EV-focused electrical steel is creating additional opportunities. However, high production costs, raw material price volatility, limited availability of high-grade materials, and lengthy qualification cycles remain important challenges for market participants.
The combination of grid modernization, electrification, energy efficiency requirements, industrial motor demand, and electric vehicle adoption is expected to continue supporting the expansion of the global electrical steel market through 2034.
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