The electrical steel market is expected to increase steadily at a compound annual growth rate (CAGR) of 6.3% from its estimated value of USD 47.8 billion in 2025 to reach USD 88.9 billion by 2035. Strong growth in the electric vehicle (EV) sector, increased manufacture of energy-efficient transformers, and rapid expenditures in renewable energy infrastructure are the main factors propelling market expansion. During the projected period, there will likely be a continued high demand for high-performance magnetic materials like electrical steel as countries concentrate on electrification and energy efficiency.
The electrical steel market is experiencing robust growth, driven by increasing demand for energy-efficient transformers, rapid adoption of electric vehicles, and expanding investments in renewable energy infrastructure. With electrification and sustainability becoming central to industrial development, electrical steel plays a crucial role in enhancing performance, reducing energy losses, and supporting the global transition to cleaner, smarter power systems.
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Key Industry Highlights:
• Primary Drivers: Rising demand for energy-efficient motors and transformers, increased adoption of EVs, and modernization of power infrastructure
• Material Segments: Grain-oriented electrical steel (GOES) and non-grain-oriented electrical steel (NGOES)
• Major Application Areas: Power transformers, distribution transformers, electric motors, generators, and inductors
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Collaboration Between Small Market Players to Strengthen Product Portfolio:
• Smaller manufacturers are increasingly engaging in strategic partnerships and technical collaborations to improve production capabilities and expand their geographic reach.
• Many SMEs are leveraging R&D investments and licensing agreements with regional universities and research centers to develop low-loss steel grades tailored for high-performance electrical devices.
• For instance, regional steel firms in Southeast Asia and Eastern Europe have begun collaborating with local utilities and appliance manufacturers to develop application-specific electrical steels for home appliances and EV motors.
• These collaborations aim to diversify product portfolios, improve competitiveness, and respond swiftly to customer-specific requirements, particularly in emerging markets.
Market Concentration:
• The global electrical steel market shows moderate to high market concentration, with a few large players dominating the high-performance steel category.
• These leading players hold a competitive advantage through scale of production, technological superiority, and long-term supply contracts with major OEMs.
• However, regional competitors are gaining ground by offering cost-effective alternatives, particularly in non-grain-oriented steel categories used in household and industrial motors.
• Product differentiation and technological edge continue to be key factors influencing market concentration.
Country-wise Insights:
India:
• The Indian electrical steel market is projected to experience robust growth, driven by the Make in India initiative, rising investment in power generation, and expansion of EV production.
• Domestic demand is supported by grid modernization, smart metering, and urban electrification programs.
• Government incentives for clean energy and duty relief on imported specialty steel have also made India a favorable market for foreign players.
Germany:
• Germany remains a core market in Europe due to its strong automotive manufacturing base and renewable energy sector.
• The country has seen significant investment in high-frequency steel for EV motors and high-efficiency transformers used in wind and solar power transmission.
• German companies are prioritizing eco-efficient manufacturing practices, boosting demand for recyclable electrical steel.
South Korea:
• Home to global steel giants like POSCO, South Korea plays a crucial role in technological innovation in the electrical steel segment.
• High domestic demand for automotive and consumer electronics and active R&D into amorphous and nano-crystalline steel variants mark the South Korean market.
• POSCO’s active expansion into India, Vietnam, and Europe further demonstrates its export-oriented growth strategy.
Global:
• On a global scale, Asia Pacific leads the market, accounting for a significant revenue share in 2025 and forecasted to retain dominance through 2035.
• North America is witnessing rising demand from utility-scale transformer upgrades and industrial motor refurbishments.
• Europe is focused on green steel production and eco-friendly electric grids, encouraging innovation in high-grade grain-oriented steels.
Companies
• Nippon Steel Corporation
• POSCO
• ThyssenKrupp AG
• ArcelorMittal
• Voestalpine AG
• Baosteel Group
• JFE Steel Corporation
• Cleveland-Cliffs Inc.
• Tata Steel Limited
Segmentation
By Product Type:
The industry is segmented into grain-oriented electrical steel and non-grain oriented electrical steel.
By Application:
The industry is categorized into inductors, motors, and transformers.
By End Use:
The industry is segmented into automobile, manufacturing, energy, household appliance, and others.
By Region:
The industry is divided into North America, Latin America, Europe, Asia Pacific, and Middle East and Africa.
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