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Electrical Steel Market

A Detailed Analysis of the Electrical Steel Market Based on the Expansion of Steel Industry, and Soaring Demand for Energy-efficient Transformers and Motors

Market Outlook

The global electrical steel market is forecast to expand at a CAGR of 7.6% and thereby increase from a value of US$40.7 Bn in 2024 to US$67.9 Bn by the end of 2031.

Attributes

Key Insights

Market Size (2024E)

US$40.7 Bn

Projected Market Value (2031F)

US$67.9 Bn

Global Market Growth Rate (CAGR 2024 to 2031)

7.6%

Historical Market Growth Rate (CAGR 2018 to 2023)

12.6%

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Market Introduction and Definition

Electrical steel, an essential constituent in the contemporary energy domain, denotes a specialized alloy engineered to possess ideal magnetic characteristics. It is utilized extensively in the fabrication of generators, electric motors, and transformers. Electrical steel's distinctive composition serves to mitigate energy losses through the reduction of core losses and eddy currents. Due to its exceptional magnetic permeability, it guarantees effective energy conversion, rendering it an essential component in power distribution and transmission systems. The worldwide market is propelled forward by the increasing demand for electrical steel as industries seek greater energy efficiency.

Multiple factors contribute to the substantial expansion of the worldwide electrical steel market. The primary catalyst is the increasing electricity demand, which is propelled by the processes of industrialization and urbanization. The heightened investment in power infrastructure expansion and modernization by nations leads to a substantial surge in the demand for electrical equipment and transformers, thereby intensifying the supply of electrical steel. Increasing utilization of renewable energy sources, including solar and wind power, contributes to the expansion of the market.

The efficient operation of these sustainable energy solutions is substantially dependent on electrical steel, which stimulates the growth of the market. In addition, advancements in electrical steel manufacturing technology improve the functionality of products, thereby appealing to a broader range of consumers. In essence, the worldwide electrical steel industry prospers due to the convergence of escalating energy demands, emerging renewable energy patterns, and ongoing technological advancements.

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Market Growth Drivers

Increasing Incorporation of Renewable Energy Sources

Presently, the worldwide electrical steel industry is undergoing a period of profound change, which is predominantly driven by the increasing incorporation of renewable energy sources. The market's significant development trajectory can be attributed, in part, to the critical transition towards sustainable and environmentally friendly power generation. Renewable energy solutions, including wind and solar power, are being enthusiastically adopted by nations across the globe as a means to address environmental issues and decrease dependence on traditional fossil fuels.

Renewable energy sources, which are distinguished by their sustainable nature and minimal ecological footprint, require sophisticated technologies and materials for efficient power generation and transmission. As a result of its extraordinary magnetic properties, electrical steel arises as a crucial component in this green energy revolution. Wind turbine generators, which are a crucial component of wind energy, make extensive use of electrical steel.

Electrical steel's distinctive magnetic properties enable the efficient conversion of wind kinetic energy to electrical energy with negligible energy losses. Likewise, for maximum efficiency, solar inverters, which are indispensable for transforming solar energy into usable electricity, depend on electrical steel market. As governments across the globe provide incentives for the adoption of renewable energy, investments in infrastructure that extensively utilize electrical steel are increasing, resulting in a surge in market demand.

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Market Restraints

Restricted Accessibility, and Capriciousness of Raw Material Costs

Notwithstanding the increasing demand and auspicious outlook, the worldwide electrical steel industry is confronted with a substantial limiting factor-the restricted accessibility and capriciousness of raw material costs. Certain alloys, most notably silicon steel, are necessary for the fabrication of electrical steel to attain the intended magnetic characteristics.

The availability of silicon, which is an essential constituent of this alloy, presents a difficulty owing to its reliance on a limited resource. Volatility in the global silicon supply chain, which is directly influenced by environmental regulations, trade tensions, and geopolitical factors, affects the electrical steel market.

Rapid Rate of Technological Advancements, and Technical Barriers

A notable obstacle that the worldwide market must contend with is the rapid rate of technological advancements and the existence of technical barriers. The industry's historical dependence on specific manufacturing processes and materials has occasionally impeded the progress of innovative technologies and cutting-edge products.

Advancements in electrical steel design, which seek to optimize energy efficiency and improve magnetic characteristics, frequently encounter obstacles stemming from industry-wide entrenched norms and resistance to change. The complex processes involved in the production of electrical steel give rise to technical obstacles. Achieving enhanced performance necessitates a profound comprehension of material science, metallurgy, and magnetic properties, thereby presenting manufacturers and researchers with a formidable challenge.

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Rapid Integration of Smart Grid Technologies

A remarkable factor propelling positive outlooks for the worldwide electrical steel market is the rapid integration of smart grid technologies across the globe. The advent of smart grids offers a paradigm shift conceivable, fundamentally altering how energy is allocated and consumed. The pursuit of more resilient and efficient power infrastructures by nations is anticipated to generate significant growth in the demand for electrical steel, which is an essential element in the fabrication of transformers and other grid equipment.

By utilizing sophisticated technologies such as sensors, communication networks, and data analytics, intelligent grids improve the efficacy and intelligence of electrical distribution. Electrical steel is of critical importance in the construction of the transformers that serve as the foundation of smart infrastructure. The enhanced magnetic characteristics and energy conservation of these transformers aid in the optimization of power distribution.

The imperative for enhanced monitoring, control, and responsiveness in the light of escalating energy demands and the incorporation of renewable energy sources propels the adoption of smart grid technology. The transition to intelligent and adaptive power grids not only enhances the robustness of power systems but also drives up the need for electrical steel, thereby establishing the market as a leader in the smart grid revolution. With countries allocating resources towards updating their electrical infrastructure in response to the demands of the twenty-first century, the electrical steel industry is poised to gain substantially from the extensive implementation of smart grid technologies.

Analyst’s Viewpoint

Significant growth is anticipated in the worldwide electrical steel market owing to the convergence of factors that influence the dynamic relationship between producers and consumers. The market's expansion is significantly influenced by the electrification of transportation, the transformative transition to renewable energy, and the escalating demand for electricity. An important factor propelling the market is the increasing worldwide need for electricity. In the light of the ongoing processes of industrialization and urbanization, countries are making substantial investments to enhance and modernize their power infrastructures.

A significant quantity of electrical steel, which is an indispensable element in transformers and other power distribution apparatus, is required to meet this demand. The perpetual expansion of electricity consumption, specifically in developing countries, guarantees an enduring market for producers of electrical steel. Regarding the dynamic between manufacturers and consumers, a prevailing trend in the market is the adoption of collaborative innovation. Consumer engagement with manufacturers to comprehend their evolving requirements and preferences is on the rise. By adopting this collaborative approach, manufacturers and end-users not only guarantee the creation of customized solutions but also cultivate a sense of partnership.

Manufacturers are allocating resources towards research and development endeavors that aim to improve the magnetic characteristics of electrical steel, thereby augmenting its efficiency and versatility in the face of emerging applications. Concerning the future, the market exhibits signs of optimism. The adaptability of the market to technological advancements and its crucial position in critical industries serve to emphasize its resilience. Ongoing investigations in the fields of material science and manufacturing processes are expected to generate advancements that enhance the efficiency of electrical steel even further.

Furthermore, in the background of countries' increasing emphasis on sustainability and energy efficiency, the market is poised to exert a significant influence on the worldwide energy configuration. In summary, the worldwide electrical steel industry is experiencing substantial expansion, driven by a convergence of elements that correspond to the changing demands of sectors and the necessity for an environmentally sustainable energy landscape.

Supply-side Dynamics

Prominent entities such as Nippon Steel Corporation, ArcelorMittal, and POSCO comprise most of the global electrical steel market. These dominant entities in the industry utilize their substantial research capacities and worldwide reach to sustain a dominant position in the market. Prominent nations that have made substantial investments in electrical steel are Germany, China, and the US. Due to its accelerated infrastructure development and industrialization, China is a significant consumer and producer of electrical steel. The automotive industry's transition to electric vehicles in the US has resulted in an increased need for electrical steel. By incorporating electrical steel into wind turbines, Germany, a leader in the adoption of renewable energy, contributes to the expansion of the market.

The market leaders in electrical steel are proactively influencing the sector's environment via calculated endeavors. These industry participants make substantial investments in research and development to introduce novel products that improve the performance of electrical steel. ArcelorMittal, as an example, places significant emphasis on sustainable steel solutions, thereby conforming to the increasing market demand for environmentally conscious products.

Nippon Steel Corporation has emerged as a leader in technological innovation, exerting a significant impact on the course of the market through the introduction of performance-oriented electrical steel products. By consistently allocating resources towards sustainable practices and technological advancements, these market leaders not only fortify their market standing but also drive the industry towards enhanced efficiency and environmental benevolence.

Market Segmentation

What will be the Leading Product Type Category?

GOES-based Steel to Dominate in Long Term with its Magnetic Properties

With the highest market share, the grain-oriented electrical steel (GOES) segment is positioned to secure dominance in the worldwide electrical steel industry. Transformers employ GOES extensively for the conveyance of electricity due to its renowned magnetic properties and power distribution efficiency. With the unique advantages provided by GOES and the robust demand for transformers in the expanding power infrastructure, this market segment is well-positioned to capture the largest market share. It is expected that NGOES will emerge as the sector of the worldwide electrical steel market with the highest rate of growth.

Demand for NGOES is increasing due to its adaptability and utilization in a vast array of electrical devices, including generators and electric motors. The demand for NGOES is being driven by the expanding utilization of renewable energy systems, electric vehicles, and diverse consumer electronics. As a result, this sector is positioned to experience substantial expansion in the future years. The market expansion of electrical steel is accelerated due to the flexibility and efficacy of NGOES, which enables industries to diversify their applications for this material.

Which is the Largest Application Segment?

Transformers Account for the Largest Revenue Share

It is anticipated that, among the segments, the transformers segment will hold the most significant market share in the worldwide market. Transformers, which are essential components in a wide range of industries, are fundamental to power transmission and distribution systems. In conjunction with the expansion of power infrastructure on a global scale, the rising electricity demand is propelling the significant market share of transformers, of which electrical steel is an essential component; thus, this segment is pre-eminent.

The electric motors sector is anticipated to witness the most rapid expansion among all electrical steel segments worldwide. The increasing prevalence of electric vehicles, the automation of industrial processes, and the burgeoning concern for energy-efficient technologies are factors driving the market demand for electric motors. The increasing adoption of electric vehicles by consumers and the shift of industries toward sustainable practices will drive demand for steel-supported electric motors that are efficient. As a result, this market segment is projected to experience the most rapid growth in the foreseeable future. The accelerated market development of electric motors can be attributed to their versatility across a wide range of applications.

Which End-use Industry Leads the Way?

The Energy & Power Generation Sector to be the Dominant Segment

It is anticipated that the energy and power generation sector will hold the most substantial portion of the worldwide electrical steel industry. As a result of industrialization and urbanization-induced increases in global electricity demand, the energy and power generation industry is extremely dependent on electrical steel for transformers and other vital components. The anticipated demand for electrical steel in this sector, which is bolstered by countries' investments in expanding and modernizing their power infrastructures, will ensure the material's dominant market position.

The automotive sector is projected to experience the most rapid growth among all electrical steel segments worldwide. An increase in the electrification of automotive systems and the rapid transition to electric vehicles (EVs) are factors propelling the demand for electrical steel. Electrical steel is a critical component in charging station transformers and electric motors, as it significantly contributes to the performance and efficacy of electric vehicles. With the automotive industry undergoing a significant shift towards more sustainable practices, there is a strong anticipation that the demand for electrical steel in this sector will experience substantial and continuous expansion.

Top Regional Markets

Swift Manufacturing Sector, and Robust Industrial Operations Uphold East Asia’s Leadership Position

East Asia now holds the most significant market share in the worldwide electrical steel industry. The area, which includes economic behemoths including South Korea, Japan, and China, is a center for substantial infrastructure development investments and robust industrial operations. Particularly, China maintains a dominant position as the largest consumer and manufacturer of electrical steel.

The substantial growth of the nation's manufacturing sector, swift urbanization, and escalating energy requirements all substantially contribute to the demand for electrical steel. Moreover, the East Asian region's emphasis on technological progress and the integration of smart grid technologies serves to increase the prevalence of electrical steel in a wide range of applications. Consequently, East Asia dominates the global market and occupies a pivotal position therein.

South Asia, and Oceania All Set for a Thriving Outlook

South Asia, and Oceania is anticipated to become the region with the most rapid expansion of the worldwide electrical steel market. This region comprises developing economies, including India, as well as countries that are increasingly prioritizing the adoption of renewable energy sources. Population growth, industrialization, and urbanization are all contributing factors to the surge in electricity demand in South Asia, which requires substantial investments in power infrastructure.

As these nations implement sustainable practices and modernize their energy infrastructure, the demand for electrical steel is anticipated to increase significantly. Furthermore, the increasing adoption of renewable energy sources and the trend toward electric mobility in nations such as Australia, and India serve to intensify the demand for electrical steel. South Asia, and Oceania are the regions characterized by a dynamic and high-growth market due to the convergence of expanding industrial activities, infrastructural development, and a transition towards greener energy sources.

Competitive Intelligence and Business Strategy

Prominent entities in the electrical steel industry, such as Nippon Steel Corporation, ArcelorMittal, and POSCO, implement all-encompassing approaches to safeguard and augment their market portions. These companies make substantial investments in research and development (R&D) to produce high-performance electrical steel through innovation. A strong R&D division at Nippon Steel Corporation, for example, is devoted to developing innovative materials and technologies.

Through consistent efforts to enhance the efficacy and magnetic characteristics of their electrical steel products, these businesses guarantee the provision of state-of-the-art solutions that effectively cater to the ever-changing demands of sectors including energy, automotive, and electronics. In addition, ongoing technological progress and the implementation of Industry 4.0 principles contribute to the improvement of operational efficiency. These entities allocate resources toward intelligent manufacturing technologies, automation, and data analytics to optimize production procedures, diminish expenses, and sustain a competitive advantage.

To summarize, the dominant participants in the electrical steel market implement a range of strategies, including technological advancements, strategic collaborations, innovation, and global expansion. Through proactive measures to address industry trends and consumer demands, these organizations strategically position themselves to attain and maintain optimal market share amidst a dynamic market environment.

Key Recent Developments

New Investment

ArcelorMittal S.A. disclosed in March 2022 its intention to invest US$317.90 Mn to establish an electrical steel manufacturing facility at the Mardyck site in Northern France. To optimize revenue, the investment aims to expand production capacity.

Market Impact: The US$317.90 Mn investment by ArcelorMittal S.A. in Northern France to establish an electrical steel manufacturing facility is anticipated to have a substantial effect on the global market. The company's dedication to satisfying the increasing need for electrical steel is demonstrated by this development, which signifies a calculated effort to increase production capacity. As a result of the increased production capacity, market dynamics may be influenced and the demand for electrical steel in a variety of applications may be met. This is especially significant in the light of the worldwide push for sustainable energy solutions and electrification.

(Source: Arcelor Mittal)

New Investment

POSCO declared in March 2021 that it would increase the production of electrical steel sheets to meet consumer demand. The organization opted to allocate US$848.6 Mn towards the annual production of 300,000 tons of steel plate.

Market Impact: The annual increase in electrical steel sheet production by 300,000 tons due to POSCO's investment of US$848.6 Mn is anticipated to have a significant effect on the global market. This action signifies a proactive reaction to the increasing desire for electrical steel among consumers, especially as sectors across the globe adopt renewable energy sources and electric automobiles. POSCO's expanded manufacturing capabilities are expected to play a role in satisfying the rising demand for electrical steel, thereby impacting the supply dynamics of the market, and potentially stimulating expansion in diverse industries dependent on this essential component.

(Source: POSCO Newsroom)

Electrical Steel Market Report Scope

Attribute

Details

Forecast Period

2024 to 2031

Historical Data Available for

2018 to 2023

Market Analysis

US$ Million for Value

Key Regions Covered

  • North America
  • Latin America
  • Europe
  • South Asia & Pacific
  • East Asia
  • The Middle East & Africa  

Key Countries Covered

  • United States
  • Canada
  • Germany
  • United Kingdom
  • France
  • Italy
  • Spain
  • Russia
  • China
  • Japan
  • South Korea
  • India
  • Thailand
  • Malaysia
  • Indonesia
  • Australia
  • New Zealand
  • GCC Countries
  • South Africa  

Key Market Segments Covered

  • Product Type
  • Application
  • End Use
  • Region

Key Companies Profiled

  • Nippon Steel Corporation
  • POSCO
  • JFE Steel Corporation
  • Baosteel Group Corporation
  • ArcelorMittal
  • ThyssenKrupp AG
  • Cogent Power
  • AK Steel Holding Corporation
  • Aperam
  • Voestalpine AG
  • Allegheny Technologies, Inc.
  • Nicore Electrical Manufactory Co., LTD.

Report Coverage

  • Market Forecast
  • Company Share Analysis
  • Competition Intelligence
  • DROT Analysis
  • Market Dynamics and Challenges
  • Strategic Growth Initiatives  

Customization & Pricing

Available upon request

Electrical Steel Market Research Segmentation

By Product Type:

  • Grain-Oriented Electrical Steel (GOES)
  • Non-Grain Oriented Electrical Steel (NGOES)

By Application:

  • Transformers
  • Motors
  • Generators
  • Inductors and Chokes
  • Misc.

By End-use Industry:

  • Energy and Power Generation
  • Automotive
  • Manufacturing
  • Electronics
  • Aerospace

By Region:

  • North America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Latin America
  • Middle East & Africa

- Companies Covered in This Report -

  • Nippon Steel Corporation
  • POSCO
  • JFE Steel Corporation
  • Baosteel Group Corporation
  • ArcelorMittal
  • ThyssenKrupp AG
  • Cogent Power
  • AK Steel Holding Corporation
  • Aperam
  • Voestalpine AG
  • Allegheny Technologies, Inc.
  • Nicore Electrical Manufactory Co., LTD.

- Frequently Asked Questions -

The market is anticipated to grow at a CAGR of 6.7% during the projected period.

The electrical steel market size was valued at US$33.5 Bn in 2023.

The US held the largest market share in 2023.

Some of the prominent players in the market are Nippon Steel Corporation, POSCO, JFE Steel Corporation, Baosteel Group Corporation, and ArcelorMittal.

The automotive segment is expected to grow at the fastest growth during the forecast period.

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