Electrical Steel Market Outlook:
Electrical Steel Market size was over USD 46.8 billion in 2025 and is assessed to reach USD 84.6 billion by the end of 2035, escalating at a CAGR of 6.8% during the forecast duration, i.e., 2026-2035. In 2026, the industry size of electrical steel is estimated at USD 49.9 billion.
The international electrical steel market is rapidly evolving, owing to a combination of industrial modernization, sustainability policies, and technological advancements. In addition, smart manufacturing, digitalization, and innovative materials are also reshaping the market’s growth across different nations. According to official statistics published by the 2024 World Manufacturing Report, the share of international trade in developing economies has gradually increased, rising from 22% to an estimated 44% as of 2023. Besides, the diversification of supply chains has eventually increased foreign investments by setting semiconductor manufacturing facilities in Malaysia, ensuring USD 13.5 billion investment as of 2023. Therefore, based on this continuous upliftment in trade and manufacturing facilities, there is a huge growth opportunity for flat-rolled silicon-electrical steel, which is positively impacting the market’s growth.
Flat-Rolled Silicon-Electrical Steel Import and Export (2023)
|
Countries/Components |
Export (USD) |
Imports (USD) |
|
China |
1.8 billion |
- |
|
Japan |
1.1 billion |
- |
|
South Korea |
589 million |
- |
|
India |
- |
990 million |
|
Italy |
- |
624 million |
|
Mexico |
- |
511 million |
|
Global Trade Valuation |
5.5 billion |
|
|
Global Trade Share |
0.024% |
|
|
Product Complexity |
1.1 |
|
Source: OEC
Furthermore, the integration of digital twin in manufacturing, localized production facilities, and circular economy practices are certain trends that are proliferating the market globally. As stated in an article published by the UK Parliament in April 2025, the worldwide digital twin industry significantly grew by almost 45% yearly between 2023, amounting to USD 13 billion to USD 16 billion, and is further projected to increase to USD 138 billion to USD 195 billion by the end of 2030. This rapid growth is effectively anticipated and fueled by implementing international digital technologies into industrial and manufacturing processes. This particular trend is also uplifted by the Industry 4.0 adoption, particularly across Europe and Asia, thus ensuring real-time monitoring and predictive maintenance of the steel quality, thereby bolstering the market’s exposure.
Key Electrical Steel Market Insights Summary:
Regional Highlights:
- The Asia Pacific region is projected to command a 35.5% share of the electrical steel market by 2035, attributable to extensive investments in grid infrastructure, renewable energy projects, and expanding power transmission networks.
- Europe is anticipated to register the fastest growth in the electrical steel market through 2035, stimulated by strong governmental emphasis on electrification, sustainable production strategies, and accelerating renewable energy integration.
Segment Insights:
- The grain-oriented electrical steel segment is expected to capture a 56.7% share of the electrical steel market by 2035, driven by its importance for enhancing energy effectiveness in large generators, distribution transformers, and power transformers.
- The transformers sub-segment is projected to hold the second-largest share in the electrical steel market over the forecast period 2026–2035, propelled by its critical role in power transmission and distribution.
Key Growth Trends:
- Electrification in public and rail transport
- Expansion in cloud infrastructure and data centers
Major Challenges:
- High production costs
- Disruptions in the supply chain
Key Players: Nippon Steel & Sumitomo Metal Corporation (Japan), POSCO (South Korea), ArcelorMittal (Luxembourg), Baosteel Group Corporation (China), JFE Steel Corporation (Japan), Thyssenkrupp AG (Germany), Voestalpine AG (Austria), United States Steel Corporation (U.S.), AK Steel Holding Corporation (U.S.), Tata Steel Limited (India), NLMK Group (Russia), Shougang Group (China), Ansteel Group Corporation (China), Hyundai Steel Company (South Korea), JSW Steel Ltd. (India), Aperam S.A. (Luxembourg), Cleveland-Cliffs Inc. (U.S.), BlueScope Steel Limited (Australia), Essar Steel (India), CSC (China Steel Corporation, Taiwan), Meranti Green Steel (Singapore).
Global Electrical Steel Market Forecast and Regional Outlook:
Market Size & Growth Projections:
- 2025 Market Size: USD 46.8 billion
- 2026 Market Size: USD 49.9 Billion
- Projected Market Size: USD 84.6 billion by 2035
- Growth Forecasts: 6.8% CAGR (2026-2035)
Key Regional Dynamics:
- Largest Region: Asia Pacific (35.5% Share by 2035)
- Fastest Growing Region: Europe
- Dominating Countries: China, United States, Japan, Germany, India
- Emerging Countries: Brazil, South Korea, Vietnam, Indonesia, Mexico
Last updated on : 3 March, 2026
Electrical Steel Market - Growth Drivers and Challenges
Growth Drivers
- Electrification in public and rail transport: Governments in Europe and Asia are generously investing in heavily electrified rail systems, which demand large-scale volumes of electrical steel for transformers and motors. Based on government investments published by the PIB Government in January 2026, railways in India have deliberately electrified nearly 99.2% of its network in November 2025, which has made it one of the world’s most electrified rail systems. Besides, the aspect of electrification pace has rapidly increased from 1.4 km/day to more than 15 km/day as of 2025. Meanwhile, railways in the country made an expansion in solar power capacity to 898 MW from 3.6 MW, marking a transformational growth. Therefore, owing to such developments, there is a huge growth opportunity for the electrical steel industry in the country.
- Expansion in cloud infrastructure and data centers: The increase in worldwide data centers needs dependable power distribution systems, which is positively impacting the market globally. As per an article published by the U.S. Department of Energy (DOE) in December 2024, data centers effectively consumed nearly 4.4% of total electricity usage in the U.S. as of 2023, and are further predicted to consume an estimated 6.7% to 12% of the overall electricity by the end of 2028. Furthermore, there has been a surge in the total data center electricity utilization from 58 TWh to 176 TWh as of 2023, and is further expected to range between 325 TWh and 580 TWh by the end of 2028. Therefore, with an increase in data centers, there is an expansion of digital infrastructure, which is positively driving the market exposure.
- Surge in renewable energy systems: The rise in renewable energy systems is also directly boosting the market demand internationally. These particular technologies need effective transformers and generators, which are enhancing market growth. According to the 2026 IEA Organization article, the international capacity of renewable sources of electricity generation is projected to double by 2030, increasing by 4,600 GW. Based on this, solar photovoltaic accounts for nearly 80% of the international increase, which is followed by hydropower, wind, bioenergy, and geothermal. Besides, across more than 80% of countries globally, the renewable power capacity is set to grow rapidly between 2025 and 2030, thereby making it suitable for fueling the market growth and expansion.
Challenges
- High production costs: The electrical steel market requires specialized processes such as cold rolling, annealing, and coating to achieve precise magnetic properties. These particular steps are energy-intensive and demand high-quality raw materials, such as silicon and iron ore, which significantly raise costs compared to conventional steel. Producers tend to invest in advanced R&D to reduce core losses, adding further financial pressure. Besides, rising electricity prices in Asia and Europe have already impacted margins for leading companies such as Nippon Steel and Thyssenkrupp. Compliance with environmental regulations compounds expenses, as firms must upgrade facilities with emission control systems and waste treatment technologies. Small-scale manufacturers often struggle to compete due to limited economies of scale, restricting innovation and market entry.
- Disruptions in the supply chain: The market is heavily reliant on stable access to raw materials, particularly iron ore, coking coal, and specialty alloys. Global supply chains have faced repeated disruptions due to geopolitical tensions, trade restrictions, and logistical bottlenecks. For instance, the Russia-Ukraine conflict disrupted steel exports from Eastern Europe, while shipping delays in the Asia Pacific affected delivery schedules for Baosteel and POSCO. Besides, the reliance on a few suppliers for high-grade silicon steel creates vulnerability to price volatility. Moreover, companies attempt to diversify sourcing strategies, but this often raises procurement costs. Environmental restrictions on mining in countries like India and Australia further tighten supply. These disruptions increase lead times, raise costs, and hamper long-term planning, as manufacturers cannot reliably forecast material availability.
Electrical Steel Market Size and Forecast:
| Report Attribute | Details |
|---|---|
|
Base Year |
2025 |
|
Forecast Year |
2026-2035 |
|
CAGR |
6.8% |
|
Base Year Market Size (2025) |
USD 46.8 billion |
|
Forecast Year Market Size (2035) |
USD 84.6 billion |
|
Regional Scope |
|
Electrical Steel Market Segmentation:
Product Type Segment Analysis
The grain-oriented electrical steel segment, which is part of the product type, is anticipated to garner the highest share of 56.7% in the electrical steel market by the end of 2035. The segment’s upliftment is highly driven by its importance for enhancing energy effectiveness in large generators, distribution transformers, and power transformers. According to official statistics published by NLM in October 2023, a grain-oriented steel usually comprises 6.5% silicon, which is further characterized by a suitable Goss texture, effectively manufactured through the rolling technique. Besides, the nitriding duration in the process of making this particular steel is 90 second and meanwhile the nitriding amount accounts for 185 ppm, denoting a complete secondary recrystallization structure with robust texture, thereby proliferating the segment’s growth and expansion.
Application Segment Analysis
The transformers sub-segment in the market is projected to account for the second-largest share during the forecast period. The sub-segment’s growth is highly propelled by its critical role in power transmission and distribution. Electrical steel is essential in transformer cores because of its superior magnetic properties, which minimize energy losses and improve efficiency. With international electricity consumption rising and renewable energy integration accelerating, the demand for efficient transformers is expected to surge through 2035. Besides, governments worldwide are investing heavily in grid modernization projects, such as the U.S. Department of Energy’s initiatives to upgrade transmission infrastructure, which directly boosts transformer demand. In emerging economies, such as India and China, rapid urbanization and industrialization are driving large-scale deployment of transformers to support expanding power networks.
Technology Segment Analysis
By the end of the stipulated timeline, the semiconductors segment, which is part of the technology, is expected to hold the second-highest share in the market. The segment’s development is highly propelled by significantly functioning as an alloying element to deliberately manage energy loss, structural properties, and magnetic efficiency in electrical machines. As per an article published by the Congress Government in April 2023, the 2022 CHIPS Act generously appropriated USD 52.7 billion to readily execute semiconductor manufacturing by the end of 2027. In addition, this comprises USD 39 billion in financial incentives to extend domestic manufacturing capacities across the overall semiconductor supply chain. Moreover, the Act also provided USD 11 billion for R&D programs to effectively promote U.S.-based leadership in generating cutting-edge semiconductor technologies, thus boosting the segment’s growth.
Our in-depth analysis of the electrical steel market includes the following segments:
|
Segment |
Subsegments |
|
Product Type |
|
|
Application |
|
|
Technology |
|
|
End use Industry |
|
|
Coating Type |
|
|
Equipment Type |
|
Vishnu Nair
Head - Global Business DevelopmentCustomize this report to your requirements — connect with our consultant for personalized insights and options.
Electrical Steel Market - Regional Analysis
APAC Market Insights
The Asia Pacific electrical steel market is anticipated to garner the largest share of 35.5% by the end of 2035. The market’s upliftment in the region is highly fueled by large-scale investments in grid infrastructure, renewable projects, an increase in the demand for power transmission, rapid urbanization, and advanced technologies. According to official statistics published by the Institute for Energy Economics and Financial Analysis in September 2025, in terms of the power-transmission network in India, 8,830 circuit kilometers (ckm) of the latest transmission lines have been commissioned against a target of 15,253 ckm. Additionally, almost 71% of Inter-State Transmission System (ISTS) corridors readily operate below 30% utilization. Moreover, Green Energy Corridor (GEC) has enabled the commissioning of 27.4 GW of renewable energy capacity, along with an additional 36 GW in the pipeline, which is positively impacting the market’s expansion in the region.
The electrical steel market in China is growing significantly, owing to an increase in prioritizing steel technologies, renewable integration, the presence of massive infrastructure projects, and the adoption of eco-friendly processes. As per an article published by Resources, Conservation and Recycling in August 2025, the iron and steel industry in the country readily consumed more than 400 TWh of electricity. Besides, the supply and demand aspect has indicated that the electricity demand for the country’s steel production is expected to reach over 700 TWh by the end of 2050, which is nearly twice its present level. Additionally, this particular increase is extremely noteworthy under the circumstances that the domestic steel production decreased by more than 40%. Moreover, the electricity utilization contributed to 25.7% of the overall carbon reduction for net-zero emissions of the nation’s iron and steel sector, thus making it suitable for bolstering the market’s demand.
An increase in sustainable steel production, electric vehicle adoption objectives, generous government investments, business incorporating green chemical processes, along with a rise in demand for transformers are boosting the market in India. Based on government estimates published by the IBEF Organization in November 2025, the electricity power consumption in the country accounted for 9.5% growth to 1,503.6 billion units. In addition, the peak power demand is projected to be 277 GW by the end of 2026, while the consumption accounted for 1,694 billion units of electricity as of 2025, denoting an upsurge by 33% and eventually translating into a 5-year growth rate of 7.4%. Moreover, the country’s power sector represented an investment of USD 461.9 billion, thus driving the rising demand for market growth and expansion.
Europe Market Insights
Europe in the electrical steel market is expected to emerge as the fastest-growing region during the forecast period. The market’s development in the region is highly propelled by robust government strategies in sustainable chemical production, electrification, and clean energy. Additionally, the market demand is primarily fueled by motors and transformers utilized in renewable energy integration, industrial modernization, and electric vehicle adoption. According to official statistics published by the Europe Electric in April 2024, the regional energy transition has focused on a significant increase in electrification, resulting in 35% by the end of 2030, as well as 61% by 2050. Moreover, the overall electricity makes up to 23% of the overall energy consumption in the region, which is leading to rapid expansion of the overall market.
The electrical steel market in Germany is gaining increased traction, owing to government-funded sustainability programs, robust industrial base, advanced manufacturing facilities, and a rise in the automotive industry. As stated in an article published by the ITA in August 2025, global manufacturing exports in the country demonstrated modest growth by rising from USD 955 billion as of 2022 to more than USD 1 trillion in 2023, and further amounting to nearly USD 991 billion in 2024. Besides, the 2024 U.S. advanced manufacturing exports to the country amounted to USD 37 billion, comprising the latest merchandise trade. Meanwhile, regional statistics indicated the valuation of the exports to the country at an estimated USD 43 billion. Therefore, all these factors are positively impacting the manufacturing industry, which is deliberately expanding the market in the country.
Advanced Manufacturing Industrial Growth in Germany (2022-2024)
|
Components |
2022 (USD Million) |
2023 (USD Million) |
2024 (USD Million) |
|
Overall Exports |
955,316 |
1,026,836 |
991,050 |
|
Overall Imports |
753,557 |
764,300 |
721,621 |
|
Imports from the U.S. |
35,978 |
38,998 |
36,753 |
|
Trade Surplus/Deficit |
201,759 |
262,536 |
269,429 |
|
EUR-USD Exchange Rate |
1.05 |
1.08 |
1.08 |
Source: ITA
The aspects of sustainable production, alignment with regional decarbonization objectives, and the presence of modernization programs are readily driving the need for the market in Italy, positively impacting electric vehicle, industrial machinery, and transformer applications. Regarding this, as per the June 2024 South East Asia Iron and Steel Institute Organization article, there has been an increase in the production of rolled steel products by 22.2% and by 7.1% for flat steel products in the country. In addition, there has also been an increase in domestic steelmakers by 12.9% as of May 2024, accounting for 1.9 million tons in 2023. Moreover, the production of long steel products increased by 1.8% in May 2023, as well as by 22.2% to 1.2 million tons. Besides, flat products output catered to 765,000 tons, thereby proliferating the market growth in the overall nation.
North America Market Insights
North America in the electrical steel market is projected to witness considerable growth by the end of the stipulated timeline. The market’s growth in the region is highly driven by advanced manufacturing equipment, an increase in the demand for motors and transformers, and generous government allocation to clean energy chemical production. Based on government estimates published by the Congress Government in May 2022, the steel consumption share in the U.S. supplied by domestic mills has readily varied from 70% to 90%. Besides, as per the September 2025 ITA data report, the steel mill products capacity in the U.S. has been estimated at 78.4%, denoting a surge of 0.5% points from 77.9% in August. Moreover, the domestic imports of steel mill products accounted for 18.4 million metric tons, thereby denoting a huge growth opportunity for the market in the overall region.
U.S.-Based Steel Mill Products Imports by Partner (2025)
|
Countries |
Import % |
|
Other Countries |
34 |
|
Canada |
18.3 |
|
Brazil |
16.4 |
|
Mexico |
11.7 |
|
South Korea |
10.8 |
|
Germany |
4.5 |
|
Taiwan |
4.3 |
Source: ITA
The electrical steel market in the U.S. is gaining increased exposure, owing to renewable integration, automotive electrification, grid modernization, as well as sustainability and regulation. According to official statistics published by the EIA Government in August 2024, there has been an increase in the combined sales of battery electric vehicles, plug-in hybrid electric vehicles, and hybrid vehicles from 17.8% of the overall new light-duty vehicle sales as of 2024 to 18.7% in the second quarter of the same year. Additionally, this increase in the hybrid and electric vehicle industry share is readily driven by hybrid electric vehicle sales, which further increased by 30.7% year-over-year (YoY). Therefore, based on this increase, electrical steel is extremely crucial for the stators and rotors in electric motors, inverters, and generators, thereby making it suitable for boosting the market’s exposure in the country.
The aspects of clean energy investments, industrial expansion, and environmental mandates are certain factors that are responsible for bolstering the market in Canada. As stated in an article published by Natural Resources Canada in February 2026, an overall 1,344 exploration and mining organizations comprising domestic mining assets are valued at USD 352.6 billion as of 2024, denoting a 4.1% increase from USD 338.8 billion in 2023. Of these organizations, 747 constitute suitable mining assets that are located internationally, amounting to USD 240.6 billion, further denoting a surge by 8.1% from the revised valuation of USD 222.4 billion in 2023. Therefore, the mining industry significantly depends on electrical steel for generators and motors, with the provision of government-funded programs that readily support innovative manufacturing technologies.
Key Electrical Steel Market Players:
- Nippon Steel & Sumitomo Metal Corporation (Japan)
- POSCO (South Korea)
- ArcelorMittal (Luxembourg)
- Baosteel Group Corporation (China)
- JFE Steel Corporation (Japan)
- Thyssenkrupp AG (Germany)
- Voestalpine AG (Austria)
- United States Steel Corporation (U.S.)
- AK Steel Holding Corporation (U.S.)
- Tata Steel Limited (India)
- NLMK Group (Russia)
- Shougang Group (China)
- Ansteel Group Corporation (China)
- Hyundai Steel Company (South Korea)
- JSW Steel Ltd. (India)
- Aperam S.A. (Luxembourg)
- Cleveland-Cliffs Inc. (U.S.)
- BlueScope Steel Limited (Australia)
- Essar Steel (India)
- CSC (China Steel Corporation, Taiwan)
- Meranti Green Steel (Singapore)
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- Nippon Steel & Sumitomo Metal Corporation is one of the largest producers of electrical steel globally, with a strong focus on grain-oriented electrical steel used in transformers. The company has invested heavily in R&D to enhance magnetic properties and reduce core losses. Its tactical expansion in Asia positions it as a leader in supplying advanced electrical steels for energy-efficient applications.
- POSCO is a major supplier of non-grain-oriented electrical steel, catering to the automotive and appliance industries. The company emphasizes sustainability, with initiatives to lower carbon emissions in steel production. POSCO’s global supply chain and technological advancements make it a competitive force in the electrical steel market.
- ArcelorMittal produces a wide range of electrical steels, serving both industrial and consumer applications. The company focuses on innovation, particularly in high-performance steels for renewable energy integration. Its Europe base and global operations permit it to balance regional demand with international growth opportunities.
- Baosteel Group Corporation is one of the largest China-specific producers of electrical steel, with significant capacity in both grain-oriented and non-grain-oriented segments. The company benefits from strong domestic demand driven by China’s infrastructure and energy projects.
- JFE Steel Corporation in advanced electrical steels, particularly for automotive and industrial machinery applications. The company invests in eco-friendly technologies to align with Japan’s sustainability goals. Its strong domestic presence and export strategies make JFE a key player in the global electrical steel landscape.
Here is a list of key players operating in the global market:
The international electrical steel market is highly competitive, dominated by Asia-based producers such as Nippon Steel, Baosteel, and POSCO, alongside strong Europe-specific players, including Thyssenkrupp and Voestalpine. Additionally, U.S. manufacturers, including Cleveland-Cliffs and U.S. Steel, are pursuing mergers and acquisitions to strengthen their supply chains. Moreover, tactical initiatives include heavy investment in R&D for advanced grain-oriented and non-grain-oriented steels, sustainability programs to reduce carbon emissions, and partnerships with renewable energy projects. For instance, in October 2025, Cleveland-Cliffs Inc. declared its strategic partnership with POSCO, Korea’s large-scale steelmaker and the world's third-largest steelmaker outside China. This partnership is based on the disclosed transformative Memorandum of Understanding (MoU), thereby making it suitable for expanding the electrical steel industry globally.
Corporate Landscape of the Electrical Steel Market:
Recent Developments
- In December 2025, ArcelorMittal France has readily prepared to unveil the latest electrical steels production line in Mardyck, which is considered the largest ArcelorMittal investment in the whole of Europe in the past 10 years.
- In August 2025, JFE Steel Corporation, along with JSW Steel Limited, effectively expanded the manufacturing capacity of JSW JFE Electrical Steel Private Limited as well as JSW JFE Electrical Steel Nashik Private Limited by investing an estimated 120 billion yen and an additional 21 billion yen as working capital.
- In December 2024, Meranti Green Steel developed a green steel facility in Thailand by setting up a modernized and integrated EAF and DRI facility with ongoing casting and hot strip mill. The company has also targeted exploring suitable opportunities for future certified green steel products, with the creation of off-site renewable energy in cooperation with renewable energy partners.
- Report ID: 8409
- Published Date: Mar 03, 2026
- Report Format: PDF, PPT
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