Grain-oriented Silicon Steel Market Size & Share, by Application (Power Transformers, Distribution Transformers, Generator Cores, Electrical Motors); Motor; Product Type; End use; Thickness Grade - Global Supply & Demand Analysis, Growth Forecasts, Statistical Report 2026-2035

Grain-oriented Silicon Steel Market - Growth Drivers and Challenges

Growth drivers

• Rising demand for energy-efficient transformers: The International Energy Agency states that the global electricity demand increased by 2.2% in 2023, which was less than the 2.4% growth that was recorded in 2022. Over the next three years, the world's need for electricity is predicted to increase more quickly, averaging 3.4% per year until 2026, thus encouraging utilities to deploy low-loss transformers. Core-loss reduction by GOES was reported to reach as much as 31% over conventional steel. Further, around 60 million distribution transformers are installed on utility poles and pads in the U.S., and they are always in operation. In some power-hungry regions like China and India, high-efficiency transformer cores remain the primary stimulus to the consumption of GOES.
• Growth of renewable energy & electrification: The Central Electricity Authority reports that the current overall capacity for electricity generation based on renewable energy is 203.18 GW. This accomplishment demonstrates India's increasing dedication to renewable energy and its advancements in creating a more environmentally friendly future. India's installed capacity for renewable energy increased by an incredible 24.2 GW (13.5%) in a single year, from 178.98 GW in October 2023 to 203.18 GW in October 2024. GOES is very important for reducing transformer energy loss and keeping it efficient in an environment where renewable loads are fluctuating. By 2030, there will be 250 million EVs in the STEPS, four times as many as there were at the end of 2024, across all modes except for 2/3Ws. Over 90% of vehicles are electric, as compared to the percentage in 2024. Thus, it increases the demand for charging infrastructure powered with GOES-based transformers, further supporting the market.
• Urbanization and industrialization in emerging economies: By 2050, it is anticipated that 68% of the world's population will reside in urban regions, up from 55% at present. According to recent United Nations data, urbanization, along with global population growth, could result in an additional 2.5 billion people living in urban areas by 2050, with nearly 90% of this increase occurring in Asia and Africa, resulting in rapid infrastructure expansion. The electricity demand in India is projected to double by 2040, due to growing industrialization in the region.

Emissions from Electricity Generation

Rising CO₂ emissions from electricity generation are accelerating demand for energy-efficient technologies, directly driving growth in the global grain-oriented silicon steel (GOES) market. GOES is a critical material used in transformer cores due to its superior magnetic properties and low core loss, which helps reduce energy waste during transmission. As governments and utilities worldwide push for cleaner grids and stricter emission standards, there's a growing need to modernize aging infrastructure with high-efficiency transformers. This shift boosts consumption of GOES, especially in renewable energy integration and smart grid deployment. Ultimately, the pressure to curb emissions is transforming GOES from a niche material into a strategic asset for sustainable power systems.

CO2 Emissions from Electricity Generation (in Mt)

Source: IEA

Evolution of Nuclear Power Generation (in TWh)

Source: IEA

Challenges

• Silicon metal supply constraints: According to supply-chain constraints, the GOES industry depends on high-purity silicon metal, with limited production capacity being offered and geopolitical tensions straining connections, especially between major producers such as China and the U.S. The shortages in raw materials and the price hikes cause delays in the manufacturing of GOES. This directly menaces the manufacturers' capacities to respond to the worldwide rising demand for energy-efficient transformers and electrical steel products.
• High energy consumption in production: Energy-intensive processes, such as high-temperature annealing and cold rolling, are the most significant in the manufacturing process for GOES. Increasing costs for energy in areas where carbon regulations are stringent make production expensive and diminish profit margins. These hindrances discourage capacity expansion and innovations in newer facilities, thereby slowing down marketing. With a slip in capacity expansion, manufacturers have become overwhelmed with a demand for green technologies, which delays supply chain responsiveness to this fast-growing market.