Author: Prithu Chawla, Senior Research Analyst
20 February 2025
According to a new report by UnivDatos, The Electrical Steel Market is expected to reach USD 58.4 Billion in 2032 by growing at a CAGR of 6.4%. The electrical steel market, also called silicon steel or transformer steel, is growing steadily because energy-efficient material is needed in transformers, motors, and generators. The use of electrical steel, designed for its magnetic behaviour, is indispensable to reduce energy loss and improve electrical equipment performance. Market drivers include a global push for energy efficiency, the swift adoption of electric vehicles (EVs), and increased investments in renewable energy infrastructure. With industries and governments placing more and more emphasis on sustainable development, demand for high-performance electrical steel products remains strong.
Looking ahead, markets across Asia including China and India are likely to become key electrical steel growth markets. Demand is also accelerated as China's government policies encourage the development of renewable energy and contribute to the upgrading of the national power grid. China's 'Made in China 2025' initiative and recent five-year plans outline the modernization of infrastructure and increasing domestic manufacturing of high-efficiency products, such as electrical steel for the manufacture of power transformers and EV motors. Similarly, in India, the "National Electric Mobility Mission Plan" and increased spending on infrastructure by way of "Power for All" are also increasing the demand for electrical steel. Additionally, these policies not only help integrate renewable energy but also enhance the efficiency of power distribution networks, thus supporting the buoyant growth rate of the global electrical steel market.
With an increased tour of focus on minimizing energy losses in the entire industries, particularly in power production and dissemination, energy efficiency has turned into an international focus. Transformers and electric motors are manufactured using that fall prime importance in reducing the energy losses using electrical steel, which is a unique material for connecting the coils to the magnetizer. With increasing demands for energy conservation in countries, the adoption of stricter energy conservation policies and industries trying to minimize cost burden of operation through minimizing energy waste, electrical steel of high quality has become extremely important. Specifically, industries such as industrial automation, commercial buildings and utilities have particularly strong demand for improved energy efficiency. Therefore, the electrical steel market is a central driver for the push towards sustainable and efficient solutions.
As electric vehicle production surges, assuming we continue on this path, a major demand for non-grain-oriented steel for the electric motors powering these vehicles has arisen. Automotive manufacturers and governments around the world are setting out on their own to achieve the same ambitious targets for EV growth by cutting slivers of carbon emissions. Take, for example, China, the U.S. and other European countries that are offering incentives for and enacting stricter emissions regulations aimed at helping EV production. Non-grain oriented electrical steel is a critical component for high performance electric motors used in EVs, where the electric motor demand for efficiency shall be sustained over time. The electrical steel market is projected to earn solid revenues due to this growing trend in the automotive industry in the forthcoming years.
In acquiring public contracts for wind and solar power projects and building the hydrogen production facility, much of the demand for the electrical steel transformer and generator was driven by the public to build and ensure its success. In this context, grain oriented electrical steel is of the greatest importance because it needs to be in transformers which are key to distribution of power from renewable sources. Thus, countries all over the world start taking policy support for renewable energy through the European green deal and China’s plan to peak the carbon emissions by 2030. The requirement for integration of renewable energy into the grid while minimizing loss of energy provision makes the use of electrical steel the crux for these energy transformations with expansion of renewable energy being a major market driver.
Demand for electrical steel is driven rapidly by industrialization and urbanization mainly in emerging economies like China and India and Southeast Asian countries. The efficient distribution of power is required from infrastructure development such as new power grids, residential buildings and industrial facilities, and this is often achieved with electrical steel in transformers and other energy equipment. These economies increase as their energy demand does and the production and distribution increases. Along with modern and energy efficient appliances and systems in buildings, urbanization also requires electrical steel in motors and transformers. Thus the Electrical steel market is directly influenced by the progress of economic growth in these regions and thus generates sustained demand.
Finally, we have discussed the strong convergence of factors that drive the electrical steel market and explain how it is a matter of necessity for today’s industrial landscape to use energy efficient materials. As energy conservation is being pushed globally, the rapid rise of electric vehicle production, the expansion of renewable energy infrastructure and continued industrialization of emerging economies, electrical steel has proved to be the indispensable material supporting sustainable development. As increasing government support and corporate initiatives toward this material are driving increased demand for both grain oriented and nongrain oriented electrical steel, it becomes a pillar material in modern energy systems and manufacturing. The electrical steel market is expected to enjoy steady growth and development in view of the continuing efficiency and environmental considerations for industries and governments.
Market Size, Trends, & Forecast by Revenue | 2024−2032
Market Dynamics – Leading Trends, Growth Drivers, Restraints, and Investment Opportunities
Market Segmentation – A detailed analysis by Type and Application
Competitive Landscape – Top Key Vendors and Other Prominent Vendors
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