Posted On: SEP-2026 | Categories : Chemicals and Materials
The global energy transition is often associated with visible technologies such as renewable power plants, electric vehicles, batteries, and charging networks. However, many of these systems depend on a less visible material that determines how efficiently electricity is generated, transmitted, and converted: electrical steel.
Electrical steel is a specialized steel product designed for applications where reducing energy loss is critical. It forms the core material inside transformers, electric motors, generators, and other electromagnetic equipment. While global crude steel production exceeds 1.8 billion tonnes annually, electrical steel represents only a small portion of total steel output. Its importance comes from its role in improving energy efficiency across power infrastructure and electrified industries.
The expansion of renewable energy, grid modernization, industrial automation, and electric mobility has changed the position of electrical steel. It is no longer viewed only as a specialty steel product for equipment manufacturers; it has become an important material for infrastructure development and industrial competitiveness.
The reason is straightforward: electrification requires not only more electricity generation but also more efficient ways to move and use electricity. Electrical steel enables that efficiency by reducing losses in transformers and motors used throughout the energy system.
Electrical steel is mainly divided into two categories: grain-oriented electrical steel (GOES) and non-grain-oriented electrical steel (NGOES). Both serve different parts of the electrification value chain.
GOES: Supporting Power Transmission and Grid Expansion
GOES is primarily used in transformers because it is optimized for applications where magnetic flux follows a specific direction. Transformer manufacturers use GOES in transformer cores because lower energy losses improve efficiency throughout the equipment’s operating life.
The importance of GOES is closely linked to electricity infrastructure. As countries expand renewable energy capacity, transmission networks, and distribution systems, utilities require more transformers to connect generation sources with consumers.
A wind farm, solar installation, or large industrial facility does not operate independently from the grid. Electricity must be stepped up, transmitted, and distributed through transformer networks, making GOES an important input for energy infrastructure.
thyssenkrupp Steel describes grain-oriented electrical steel as a material used particularly in transformers because its magnetic properties support efficient energy conversion with reduced losses.
NGOES serves a different purpose. It is used in rotating electrical machines where magnetic fields change continuously, including:
electric vehicle traction motors
industrial motors
generators
compressors
automation equipment
The growth of electric mobility has increased attention toward NGOES because motor efficiency directly affects vehicle performance. Automakers and suppliers are focusing on materials that reduce energy losses, improve thermal performance, and support compact motor designs.
The transition from internal combustion engines to electric powertrains has therefore expanded the role of electrical steel within the automotive supply chain. Electrical steel is not a visible consumer component, but it influences range, efficiency, and motor performance.
ArcelorMittal highlights non-grain-oriented electrical steels as important materials for applications including automotive traction motors, wind power, and other electrification technologies.
Electricity systems are undergoing significant restructuring. Renewable energy sources are often located far from population centers, creating a greater requirement for transmission infrastructure and grid upgrades.
This transformation increases the importance of transformers and, consequently, GOES.
The challenge is that transformer manufacturing cannot expand immediately when demand increases. Production requires specialized electrical steel grades, qualified manufacturing processes, and established supplier relationships. Any disruption in electrical steel availability can affect transformer production schedules and broader infrastructure projects.
The issue has become more important as governments invest in renewable integration, grid resilience, and electrification of industrial operations.
Electrical steel therefore sits at the intersection of two industries:
Steel manufacturing → electrical equipment production → energy infrastructure expansion
This connection gives electrical steel strategic importance beyond its production volume.
Electric vehicles have created a new industrial requirement for high-performance electrical steel.
Every EV requires electric motors, and the motor core depends on thin electrical steel laminations that help convert electrical energy into mechanical movement efficiently.
The automotive industry is moving toward:
higher motor efficiency
improved driving range
reduced energy consumption
compact powertrain designs
These requirements increase the importance of advanced NGOES grades.
Unlike conventional automotive steel, electrical steel is not selected mainly for structural strength. Its value comes from its ability to improve energy conversion efficiency. This makes supplier capability and material quality important considerations for automakers and motor manufacturers.
The relationship between EV production and electrical steel is also changing investment priorities among steel producers. Companies are expanding electrical steel capabilities because future automotive competition increasingly depends on electrification performance rather than only vehicle manufacturing capacity.
China has become a major force in the electrical steel industry due to its position in electric vehicles, renewable energy equipment, and steel manufacturing.
The country’s large EV production base has supported investment in NGOES capacity, while renewable energy expansion has supported transformer-related electrical steel demand.
Chinese producers have also increased exports, creating new competitive pressure in international markets. The expansion of Asian supply has become a major factor influencing electrical steel producers in Europe and other regions.
The competitive landscape is shifting from simply increasing production volume toward maintaining cost efficiency, technology capability, and access to strategic customers.
For steel companies, electrical steel represents a move away from commodity competition toward specialized manufacturing where product quality and technical capability become key differentiators.
Europe faces a unique challenge. The region requires more electrical steel to support renewable energy, electric mobility, and industrial electrification, but producers are operating under difficult market conditions.
Higher energy costs, international competition, and changing trade patterns have affected regional steel manufacturers.
thyssenkrupp Steel has highlighted the importance of electrical steel for the energy transition, particularly for transformers and electrical applications. The company has also faced pressure from increased imports and challenging market conditions affecting electrical steel production in Europe.
The situation reflects a broader industrial issue:
Countries need reliable access to strategic materials while manufacturers compete in a global market.
Electrical steel has therefore become part of discussions around industrial resilience and energy security.
Because electrical steel production requires specialized technology and long qualification periods, expanding capacity is a strategic decision rather than a short-term response.
Steel producers are investing in new production lines and upgrading facilities to address future requirements.
ArcelorMittal ArcelorMittal has expanded its electrical steel strategy, focusing on non-grain-oriented electrical steels for electric mobility and energy applications.
thyssenkrupp Steel thyssenkrupp continues to position electrical steel as a key material across the energy value chain, supplying grades for transformers, motors, and generators.
U.S. Steel U.S. Steel supplies electrical steel products for energy-related applications, including transformer and electrical equipment markets.
JSW Steel and JFE Steel India is also strengthening its electrical steel manufacturing capability. JSW Steel and Japan’s JFE Steel announced investment plans to expand grain-oriented electrical steel production capacity in India, reflecting rising domestic requirements for power infrastructure.
These investments show that electrical steel capacity is becoming a strategic manufacturing asset.
Electrical steel production requires more than conventional steelmaking capacity.
Manufacturers must maintain:
consistent material properties
precise thickness control
advanced processing capability
application-specific performance
The difficulty of producing electrical steel explains why the market has fewer specialized suppliers compared with conventional steel categories.
Companies such as Fives provide specialized processing technologies for electrical steel production lines, supporting manufacturers that require precision processing capabilities.
The competitive advantage is shifting toward companies that can produce higher-performance grades reliably and at scale.
As electrification expands, recycling electrical equipment will become increasingly important.
Electrical steel exists inside:
motors
transformers
industrial equipment
Recovering these materials is more complex than recycling conventional steel because electrical components also contain copper, insulation materials, coatings, and other materials.
Future recycling systems will need to improve recovery of valuable electrical components while supporting circular material flows across energy infrastructure and mobility systems.
Electrical steel represents a major shift in how industries evaluate materials. Traditional steel markets are often measured by production volume, pricing, and capacity. Electrical steel follows a different model where performance, reliability, and technological capability determine value.
The expansion of renewable energy, electric vehicles, and industrial electrification will require more efficient electricity conversion and distribution systems. That requirement places electrical steel at the center of the transition.
The next phase of competition will not only depend on producing more steel but on producing specialized steel capable of improving energy efficiency across global infrastructure.
Electrical steel may be a small segment of the global steel industry, but its influence extends across some of the largest industrial transformations underway today: the modernization of power grids, the electrification of transportation, and the shift toward a more efficient energy economy.