Electrical Steel Market Size, Share and Forecast Trends - Growth Analysis and Outlook Report (2026-2035)

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Key Drivers of Electrical Steel Market Growth

Electric Vehicle Boom Driving NOES Demand for Motor Cores

The global electric vehicle production boom is the single most transformational demand driver for non-grain-oriented electrical steel, creating a new and rapidly scaling demand category within an industry previously dominated by transformer and industrial motor applications. Each battery electric vehicle requires high-grade NOES for its traction motor stator core, with material specifications demanding silicon contents of 2.5% to 3.5%, thickness of 0.20mm to 0.27mm, and precise control of magnetic properties that standard industrial NOES grades cannot reliably provide. Global EV production is expected to reach 40+ million units annually by 2030, translating into millions of tonnes of premium NOES demand that is driving capacity expansion at producers including Nippon Steel, POSCO, Voestalpine, and ArcelorMittal.

Grid Modernisation and Power Infrastructure Expansion

The simultaneous upgrade of ageing power grid infrastructure in developed economies and construction of new grid capacity in developing economies is creating persistent and growing demand for grain-oriented electrical steel in power and distribution transformers. The US Department of Energy's Grid Deployment Office programs, the EU's REPowerEU and grid investment mandates, and India's National Smart Grid Mission collectively represent billions of dollars in transformer procurement that translates directly into sustained GOES demand across the forecast period. The Cleveland-Cliffs announcement to supply the US Pentagon with electrical steel reported in July 2026 illustrates the strategic national security dimension of domestic electrical steel supply that is accelerating government-backed production investment.

Renewable Energy Wind and Solar Generator Demand

The rapid global expansion of wind and solar power generation capacity is creating growing demand for electrical steel in the generators, motors, and transformers that are integral to renewable energy infrastructure. Wind turbines require grain-oriented electrical steel in their step-up power transformers and non-grain-oriented electrical steel in their permanent magnet generators, with offshore wind turbines of 12MW and above requiring particularly large quantities of high-grade electrical steel per unit. The global wind power capacity additions expected to exceed 100GW annually through the late 2020s translate into consistent large-format GOES and NOES procurement that sustains demand through the forecast period.

High-Efficiency Transformer Mandates

Regulatory mandates for minimum energy performance standards for power and distribution transformers are a structural driver of electrical steel market premiumisation, compelling transformer manufacturers to specify higher-grade GOES with lower guaranteed core losses than the grades previously acceptable under less stringent efficiency standards. The EU's Ecodesign Regulation (EU) 2019/1783 implementing energy efficiency requirements for power transformers and equivalent standards in China (GB 20052), India (IS 1180), and the United States (DOE Final Rule for Distribution Transformers) mandate efficiency tiers that require premium GOES grades with maximum core loss values of 0.70 W/kg at 1.7T driving systematic upgrade of transformer core material specifications across global markets.

Key Electrical Steel Market Trends

Ultra-Thin NOES for High-Efficiency EV Traction Motors

The development and commercialisation of ultra-thin non-oriented electrical steel in thicknesses of 0.20mm and below represents the most technically demanding and commercially significant product innovation trend in the electrical steel industry, directly serving the high-speed, high-frequency operating requirements of permanent magnet and induction motors used in battery electric vehicle traction systems. Ultra-thin NOES reduces eddy current losses at high frequencies where losses scale with the square of both frequency and sheet thickness enabling motor designers to achieve higher efficiency ratings and operating speeds that translate into extended EV range per charge cycle, supporting the 400-mile range targets increasingly demanded by premium EV manufacturers.

High-Silicon Electrical Steel Development

POSCO and Hyundai Motor Group launched a collaborative research and development program for high-silicon (above 4.5% silicon) electrical steel targeting next-generation high-speed EV motor applications where conventional 3.5% silicon NOES grades cannot achieve the required combination of low core loss and high saturation flux density. High-silicon electrical steel offers superior magnetic properties at elevated silicon contents but presents significant manufacturing challenges due to increased brittleness that makes conventional cold-rolling processing extremely difficult a technical challenge that the POSCO-Hyundai collaboration is addressing through advanced processing technology development.

ArcelorMittal EAF Integration in Electrical Steel Production

ArcelorMittal launched a new phase of its electrical steel project in France in April 2026, advancing the company's strategy to integrate electric arc furnace (EAF) production routes into its electrical steel manufacturing chain as part of its commitment to decarbonising European steel production. In June 2026, ArcelorMittal announced plans to integrate EAFs into its electrical steel production chain in Europe a significant development that will enable ArcelorMittal to produce low-carbon electrical steel for EV motor and transformer applications where downstream customers are increasingly applying scope 3 carbon footprint requirements to their steel supply chains.

Insulation Coating Technology Advancements

The insulation coating applied to the surface of electrical steel sheets providing the electrical isolation between adjacent laminations that prevents short-circuit currents and reduces eddy current losses in stacked motor and transformer cores is an area of active technical development, with coating manufacturers developing chrome-free coatings that meet increasingly stringent European REACH chemical safety regulations, higher-temperature-resistant coatings for EV motors that operate at elevated temperatures, and thinner coating formulations that minimize the non-magnetic material fraction in high-density lamination stacks.

Market Challenges, Restraints, and Opportunities

The global electrical steel market faces significant operational challenges rooted in production complexity, raw material cost volatility, and the technical barriers to scaling advanced grade manufacturing to meet emerging EV motor demand. Electrical steel production is one of the most technically demanding steel manufacturing processes, requiring precise control of silicon content, temperature profiles, annealing atmospheres, and surface treatment processes that limit the number of producers globally capable of manufacturing premium grades to the tight specifications demanded by transformer OEMs and EV motor manufacturers. Raw material cost volatility particularly silicon metal pricing and energy costs for the electricity-intensive annealing processes creates margin pressure for electrical steel producers operating on fixed-price supply contracts with large transformer and motor customers who are slow to accept price adjustments that disrupt their production cost structures.

Structural restraints moderate the pace of capacity expansion and premium grade adoption across the market. The capital intensity of new electrical steel production capacity with a greenfield cold-rolling and annealing facility requiring investment of USD 500 million to USD 1 billion or more creates long lead times between investment decisions and new supply availability, creating cycles of tightness in premium grade markets when demand surges outpace announced capacity additions. The technical complexity of ultra-thin NOES manufacturing for EV motors limits the number of qualified suppliers capable of reliably producing 0.20mm grade at commercial scale, creating supply concentration risk for EV manufacturers seeking to diversify their electrical steel supply chains. Geographic concentration of premium GOES production capacity in Japan (Nippon Steel, JFE Steel) and South Korea (POSCO) creates supply chain resilience concerns for European and North American transformer manufacturers dependent on Asian imports.

Despite these structural challenges, the electrical steel market presents compelling and durable growth opportunities throughout the forecast period. The electric vehicle transition creates a structurally expanding demand base for premium NOES that did not exist a decade ago and is growing at a rate that significantly exceeds the market's historical transformer-driven demand growth trajectory. Grid modernisation programs representing trillions of dollars in global power infrastructure investment through 2035 provide a sustained and government-mandated procurement base for grain-oriented electrical steel that is insulated from short-term economic cycles. The progressive tightening of transformer efficiency standards across major global markets is driving systematic upgrade of electrical steel grade specifications in existing transformer procurement programs, expanding the market for premium low-loss GOES at the expense of standard-grade material. The full Expert Market Research Electrical Steel Market Report and Forecast 2026-2035 provides granular analysis across type, application, end use, and regional market to equip producers, distributors, transformer manufacturers, EV motor OEMs, and investors with the intelligence to capitalise on the most valuable growth opportunities.

Electrical Steel Market Segmentation

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Purchase the Regional Overview for USD 1099

If you choose to purchase the full report at a later stage, the amount already paid will be adjusted, and you will only need to pay the remaining balance.

Purchase the Regional Overview for USD 1099

If you choose to purchase the full report at a later stage, the amount already paid will be adjusted, and you will only need to pay the remaining balance.

Electrical Steel Market Regional Analysis

Asia Pacific Electrical Steel Market

Asia Pacific is the dominant regional electrical steel market, accounting for over 60% of global production and consumption, led by China the world's largest electrical steel producer and consumer Japan, South Korea, and India. India is the fastest-growing national market within Asia Pacific for electrical steel, driven by the government's National Smart Grid Mission grid expansion program, rapidly growing transformer manufacturing industry supplying both domestic and export markets, expanding EV production supported by government PLI incentives, and rising industrial motor demand from the manufacturing sector. The rising production of grain-oriented electrical steel in India with TATA Steel and JSW Steel among the domestic producers expanding electrical steel capacity is progressively reducing India's import dependence and supporting regional electrical steel market development.

North America Electrical Steel Market

North America is a significant and growing electrical steel market, supported by major grid modernisation investment under the US Department of Energy's Grid Deployment Office programs, the Infrastructure Investment and Jobs Act's transmission and grid resilience funding, and the accelerating adoption of EVs across the US market driven by IRA tax credits. Cleveland-Cliffs is the primary domestic NOES producer in the United States, supplying transformer and motor manufacturers across North America. The announcement of Cleveland-Cliffs supplying the US Pentagon with USD 400 million worth of electrical steel underscores the strategic national security importance of domestic electrical steel production capacity for US defence and grid infrastructure applications.

Middle East Electrical Steel Market

Saudi Arabia represents the most commercially active electrical steel market within the Middle East and Africa region, driven by the Kingdom's Vision 2030 economic transformation agenda that includes massive investment in power generation capacity, grid infrastructure expansion, industrial development, and the nascent electric vehicle manufacturing and adoption ecosystem. The Saudi Electricity Company's transmission and distribution grid expansion programs require large volumes of power and distribution transformers, creating consistent procurement demand for grain-oriented electrical steel from international and regional transformer manufacturers supplying the Saudi market. The industrial development zones at NEOM, Yanbu, and Jubail are creating new industrial motor and generator demand that is adding to Saudi Arabia's electrical steel consumption growth trajectory.

Europe Electrical Steel Market

Europe is a mature but strategically important and growing electrical steel market, shaped by aggressive grid decarbonisation investment under the EU's REPowerEU program, mandatory transformer efficiency standards under Ecodesign Regulation (EU) 2019/1783, and the EU's status as the world's leading EV adoption market outside China. ThyssenKrupp Steel Europe and Voestalpine AG are the primary European GOES producers, while ArcelorMittal is expanding its European electrical steel production capacity through its April 2026 project launch in France and June 2026 EAF integration announcement. The growing European transformer replacement cycle driven by the IEC 60076 efficiency upgrade standards and EU Taxonomy green investment requirements is sustaining GOES demand growth across the forecast period.

Australia is an emerging market for electrical steel, driven by the country's ambitious renewable energy transition under the National Electricity Market reforms, accelerating EV adoption supported by state government incentives across Victoria, New South Wales, and Queensland, and significant grid infrastructure investment by transmission system operators including TransGrid and AusNet. Australia's electrical steel market is primarily served by imports from Japan, South Korea, and China, with domestic consumption growing in line with transformer procurement for renewable energy generation connection and distribution grid reinforcement.

Key Industry Players in the Electrical Steel Market

The report presents a detailed analysis of the following key players in the global electrical steel market, looking into their capacity, market share, and latest developments like capacity expansions, plant turnabouts and mergers and acquisitions.

• ArcelorMittal S.A.
• China Baowu Steel Group Corp., Ltd
• Nippon Steel Corporation
• United States Steel Corporation
• State Authority of India Limited
• Tata Steel Limited

The comprehensive report looks at the micro and macro aspects of the industry. The Expert Market Research report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of the Porter’s Five Forces Model.

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