Posted On: Jun-2026 | Categories : Chemicals and Materials
Electrical steel is becoming one of the most strategically important materials in the energy transition because it sits inside the equipment that makes electrification work.
It is not as visible as batteries, copper, semiconductors, or rare earth magnets, but it directly influences how efficiently electricity is converted, transmitted, distributed, and used. Every transformer, electric motor, generator, charging station, wind turbine generator, appliance motor, and EV traction system depends on magnetic materials that can reduce energy losses.
That is why the Electrical Steel Market should not be understood as a conventional steel category. It is becoming a grid-efficiency, EV-performance, transformer-supply, and industrial-decarbonization market.
The Global Electrical Steel Market was valued at USD 41.01 billion in 2023 and is projected to reach USD 65 billion by 2030, expanding at a CAGR of 6.8%, according to Strategic Market Research. Non-grain-oriented electrical steel accounted for nearly 71.45% of the market in 2023, while transformers represented 52.40% of application demand. Those numbers matter, but the deeper market story is how demand is splitting between two high-value pathways: transformer-grade electrical steel for grids and non-grain-oriented grades for EV motors and high-efficiency rotating equipment.
The future of electrical steel will be shaped by three questions.
Can grid infrastructure expand fast enough?
Can EV motors become more efficient without adding cost and weight?
Can steel producers deliver low-loss, application-specific grades while also reducing the carbon footprint of steelmaking itself?
The energy transition requires more electricity, more grid capacity, more transformers, more motors, and more power-conversion equipment. Electrical steel is embedded across that system.
In transformers, grain-oriented electrical steel reduces magnetic losses and supports efficient voltage transformation. In motors and generators, non-grain-oriented electrical steel helps convert electrical and mechanical energy more efficiently. In EVs, the quality of electrical steel directly affects motor performance, heat generation, noise, and energy loss. In wind turbines, generator efficiency depends heavily on magnetic material performance.
This makes electrical steel a hidden constraint in electrification.
The material is not valuable only because more transformers and motors are being produced. It is valuable because the losses inside those systems now matter more. When electricity demand rises and grids become more stressed, a small improvement in transformer or motor efficiency becomes commercially significant across millions of units.
The strongest market trend is therefore not volume alone. It is loss reduction.
Grid expansion is one of the strongest forces shaping electrical steel demand.
Power systems are being rebuilt to absorb renewable energy, serve data centers, support EV charging, replace aging transmission infrastructure, and improve resilience. This is increasing demand for transformers, and transformers depend heavily on grain-oriented electrical steel.
The strategic point is that transformer steel is no longer just a manufacturing input. It is part of grid deliverability.
If utilities cannot procure transformers quickly, power projects are delayed. If transformer cores use lower-efficiency materials, grid losses increase over the asset life. If regional supply of grain-oriented electrical steel becomes exposed to imports, local grid-buildout programs become more vulnerable.
That is why the transformer side of the electrical steel market is moving closer to energy-security planning.
The International Energy Agency has warned that grid-component procurement times have stretched significantly, with large power transformers taking up to four years to secure. That makes upstream inputs such as grain-oriented electrical steel more strategically visible.
For buyers, the issue is not simply whether electrical steel is available. The issue is whether the right grade is available at the right time, in the right region, and with the right loss-performance characteristics.
EV growth is reshaping the non-grain-oriented electrical steel market.
Unlike transformer cores, electric motors operate under rotating magnetic fields. That makes non-grain-oriented electrical steel the key material for EV traction motors, industrial motors, generators, compressors, and appliance motors.
The EV opportunity is not just that more motors are being produced. It is that EV motors are more demanding.
Automakers are trying to improve range, reduce motor losses, control heat, lower noise, reduce weight, and improve torque density. These goals increase the value of thinner, low-loss, high-magnetic-flux, high-strength electrical steel grades.
A standard motor steel and a high-performance EV traction motor steel are not commercially equivalent.
This is why leading steel producers are developing dedicated EV motor grades and expanding non-oriented electrical steel capacity. Producers that can supply high-grade NOES with strong magnetic performance, thin-gauge capability, consistent coating quality, and stable processing behavior will capture higher-value demand.
The future of EV electrical steel will be decided less by tonnage and more by motor efficiency economics.
China has become a major force in electrical steel production and exports.
Fastmarkets reported that China produced 15.28 million tonnes of electrical steel in 2023, up 15% from 13.31 million tonnes in 2022. Its exports reached 1.23 million tonnes in 2023 after rising sharply in 2022, with India identified as the largest buyer of Chinese electrical steel that year.
This has two implications.
First, China’s production scale gives it major influence over global availability and pricing. As China increases production, exports become an outlet for surplus volume, especially when domestic capacity rises faster than internal demand.
Second, import pressure can challenge regional electrical steel producers, especially in Europe. The European market is particularly sensitive because grain-oriented electrical steel is linked to transformer supply and grid modernization.
The market is therefore moving into a strategic trade phase. Countries want access to affordable electrical steel, but they also want reliable domestic or regional supply for critical energy infrastructure.
This tension will shape policy, investment, and sourcing decisions through the rest of the decade.
Steel producers are not only expanding capacity; they are expanding capacity in specific regions and grades.
ArcelorMittal’s Mardyck investment in France is designed to expand electrical steel capacity for electric traction motors, industrial motors, and renewable energy generators. The facility is expected to help raise ArcelorMittal Europe’s electrical steel capacity to around 300,000 tonnes per year.
POSCO’s Gwangyang investment focuses on high-efficiency non-oriented electrical steel, with a 300,000-ton annual capacity plant and a goal to increase high-efficiency NOES capacity from 100,000 tonnes to 400,000 tonnes annually by 2025. The company links this directly to eco-friendly vehicles and high-end home appliances.
JFE Steel is expanding top-grade non-oriented electrical steel capacity at Kurashiki, targeting EV motor demand. The company stated that electrification, energy efficiency, and renewable energy adoption are expected to continue expanding demand for both non-oriented and grain-oriented electrical steel.
These moves show that electrical steel investment is not generic steel investment. It is targeted capacity for the energy and mobility transition.
A useful insight from producer activity is that electrical steel is moving closer to customer engineering.
Thyssenkrupp’s electrical steel story shows how wind turbine generator materials are developed with customer-specific requirements such as environmental durability, punchability, and conductivity. The company also separates its electrical steel strategy across grain-oriented products for transformers and non-grain-oriented powercore traction products for wind generators and electric mobility.
This matters because electrical steel buyers are not only buying coils. They are buying magnetic performance inside a specific machine design.
Motor manufacturers care about core loss, magnetic flux density, mechanical strength, punchability, coating behavior, and thermal performance. Transformer manufacturers care about loss performance, strip thickness, insulation, stacking behavior, and lifetime energy efficiency. Wind turbine manufacturers care about reliability under harsh environments.
That means product development increasingly requires steelmakers to work with OEMs, transformer producers, motor designers, and generator manufacturers.
The future market will reward steelmakers that can co-engineer grades for specific end-use systems.
Electrical steel enables decarbonization by improving energy efficiency in motors, transformers, and generators. But the steel industry itself is also emissions-intensive.
That creates a dual challenge.
Electrical steel must help customers reduce energy losses, while producers must reduce the carbon intensity of the steel they supply.
This is why green steel strategies are becoming relevant to electrical steel procurement. Buyers in automotive, grid equipment, renewable energy, and industrial sectors are increasingly exposed to emissions accounting, lifecycle assessment, green procurement, and carbon-border mechanisms.
ORF’s analysis of green-steel pathways in India, Japan, and South Korea highlights the need for hydrogen-based steelmaking, EAF expansion, common certification, technology partnerships, and regional supply-chain coordination. This matters for electrical steel because India, Japan, and South Korea are also deeply connected to EVs, transformers, industrial equipment, and advanced steel supply chains.
The next phase of competition may therefore include both magnetic performance and carbon performance.
Low-loss electrical steel made through lower-emission production routes could become more attractive for automakers, transformer makers, and renewable-energy equipment suppliers that are trying to reduce lifecycle emissions.
Thyssenkrupp Electrical Steel
Thyssenkrupp is important because it sits directly at the intersection of transformer efficiency, wind energy, and electric mobility.
Its grain-oriented electrical steel business serves transformer applications, while its non-grain-oriented powercore traction products serve wind turbine generators and electric mobility. The company frames electrical steel as essential for transformers, wind turbine generators, electric vehicles, and charging infrastructure.
The strategic signal is clear: thyssenkrupp is positioning electrical steel as a core material for both energy infrastructure and mobility systems.
However, thyssenkrupp also reflects Europe’s supply-chain challenge. Rising import pressure has made grain-oriented electrical steel a strategic policy issue, not only a product issue.
ArcelorMittal
ArcelorMittal is one of the most important companies to watch in Europe because of its Mardyck electrical steel investment.
The Mardyck facility complements Saint-Chély and is expected to raise ArcelorMittal Europe’s electrical steel capacity to around 300,000 tonnes annually. The company positions this capacity toward electric traction motors, industrial electric motors, and renewable energy generators.
This makes ArcelorMittal especially relevant to the European EV and industrial motor ecosystem. The investment also shows how electrical steel capacity is being built near automotive and energy-transition demand centers.
POSCO
POSCO is positioning itself around high-efficiency non-oriented electrical steel for eco-friendly vehicles and premium appliances.
Its Gwangyang investment is significant because it increases capacity in precisely the area where EV and appliance efficiency demand is rising. POSCO’s stated plan to expand high-efficiency NOES capacity from 100,000 tonnes to 400,000 tonnes annually by 2025 reflects the scale of expected demand.
POSCO is important because South Korea’s automotive, electronics, battery, and industrial ecosystems give it strong downstream linkage to electrical steel demand.
JFE Steel
JFE Steel is expanding high-grade non-oriented electrical steel capacity for EV motor applications.
Its Kurashiki expansion highlights the importance of top-grade NOES in the drive motors of electric vehicles. JFE also expects demand for both types of electrical steel to grow as automobiles electrify, energy use becomes more efficient, and renewable energy adoption expands.
JFE’s role is especially important because it combines Japanese advanced materials expertise with regional expansion partnerships, including India-focused electrical steel investments through JSW JFE Electrical Steel.
Nippon Steel
Nippon Steel is important because its product positioning clearly separates the two major use cases.
Its grain-oriented electrical steel supports smaller and higher-efficiency transformers. Its non-oriented electrical steel supports efficiency improvement and downsizing in motors used in EVs, hybrid vehicles, appliances, and industrial machines.
That product logic is exactly where the market is moving: transformer efficiency on one side, motor efficiency on the other.
Cleveland-Cliffs
Cleveland-Cliffs is strategically important in North America because it positions itself around domestic automotive-quality electrical steel.
Its MOTOR-MAX non-oriented electrical steel line is designed for high-frequency motors, EV traction motors, aircraft generators, and rotating equipment. The company also emphasizes its role as a domestic source for EV motor electrical steels in the United States.
This matters because North America is trying to build more resilient EV, grid, and industrial supply chains. Domestic electrical steel availability can become a competitive advantage when OEMs need qualified, stable, and regionally secure supply.
Tata Steel and Surahammars Bruk
Tata Steel’s electrical steel capabilities, including Surahammars Bruk, are relevant because European automotive and industrial buyers increasingly need high-performance motor steels.
Tata’s positioning around ultra-thin gauge electrical steel for high-performance EVs fits the broader trend toward thinner, lower-loss materials for compact and efficient electric motors.
The company is also relevant to the green-steel discussion because India and Europe both face major pressure to decarbonize steel production while supporting growing demand from mobility and energy infrastructure.
China Baowu / Baosteel
China Baowu and Baosteel are important because China’s electrical steel scale is influencing the global market.
China’s production and export momentum shows that Chinese mills are becoming increasingly important in both domestic and export supply. This creates pricing pressure in some regions but also provides supply for fast-growing markets such as India and other EV/manufacturing hubs.
For buyers, China’s role is a double-edged factor: it can improve availability and price competitiveness, but it can also increase exposure to trade measures, import rules, and policy risk.
Transformer manufacturers should watch grain-oriented electrical steel availability, import exposure, core-loss performance, and regional supply risk.
EV motor manufacturers should watch non-oriented electrical steel grade quality, thin-gauge availability, high-frequency performance, coating quality, and long-term supplier qualification.
Utilities should watch transformer lead times and upstream electrical steel supply because transformer procurement delays can slow grid expansion.
Automakers should watch whether their electrical steel suppliers can support EV motor efficiency targets at production scale.
Renewable energy equipment manufacturers should watch generator-grade electrical steel availability, especially for wind energy systems.
Governments should watch whether domestic electrical steel production can support grid modernization, EV manufacturing, transformer supply, and green-industrial policy.
The main strategic lesson is simple: electrical steel should not be treated as ordinary steel procurement.
It is a performance material.
The Electrical Steel Market is entering a more strategic phase.
For decades, the market was shaped by industrial motors, appliances, and conventional transformer demand. That demand remains important, but the growth profile is changing.
Grid modernization is increasing demand for transformer-grade grain-oriented electrical steel.
EV adoption is increasing demand for high-grade non-oriented electrical steel.
Renewable energy is increasing demand for efficient generators and transformers.
Data centers and electrified infrastructure are increasing pressure on grid equipment supply chains.
Green-steel policies are increasing scrutiny of steel production emissions.
Import pressure and regional capacity expansion are turning electrical steel into a trade and industrial policy issue.
The companies that lead this market will be those that combine magnetic performance, production scale, regional reliability, application-specific grade development, and lower-carbon production pathways.
The market’s future will not be determined only by how much electrical steel is produced.
It will be determined by who can produce the right grades for the right applications at the right carbon intensity and with the right supply security.
Electrical steel may be hidden inside motors and transformers, but its role in electrification is becoming increasingly visible.