Overview:

The market for electrical steel is projected to be valued at approximately USD 48.2 billion in 2025, with expectations to reach around USD 89.8 billion by the year 2035. This represents a compound annual growth rate (CAGR) of roughly 6.5% over the ten-year forecast period, indicating a steady expansion trajectory. This growth trajectory underscores the critical role of advanced electrical steel types in modern power systems, including their use in electric vehicles, vital industrial machinery, and the integration of renewable energy sources into existing grids.

A significant catalyst for market expansion is the global push towards energy efficiency and the development of cleaner power technologies. Both governmental bodies and private enterprises are increasingly focused on reducing energy consumption and minimizing carbon footprints. This global emphasis is accelerating investments in upgrading electrical infrastructure, which in turn escalates the demand for electrical steel variants that offer superior magnetic properties and reduced energy losses during operation.

The increasing deployment of smart grid technologies and the expansion of power generation and distribution networks are further bolstering demand within the sector. The surging adoption of electric vehicles (EVs) stands out as a particularly strong driver; electrical steel is an essential component in EV motors and charging units, prized for its efficiency, longevity, and lightweight characteristics crucial for vehicle performance and range.

Stringent global emission standards continue to favor the production and sale of EVs over traditional internal combustion engine vehicles. This trend is positioning the automotive industry as a key segment for high-performance electrical steel, demanding materials optimized for electric powertrains. Furthermore, the rising demand for renewable energy, particularly from large-scale solar and wind power installations, heightens the need for reliable transformers and related equipment, all of which rely heavily on electrical steel for efficient operation and long-term reliability.

Technological advancements in steel processing, such as precise laser scribing and innovative insulation coating techniques, are enabling manufacturers to produce higher grades of electrical steel that yield enhanced performance and efficiency. Concurrently, metallurgical innovations are leading to the development of steels with ultra-low core losses, directly supporting global efforts towards energy conservation across diverse applications.

The shift from 2020 to 2024 reflected solid market growth, fueled by increasing applications in power generation, automotive, and industrial sectors, particularly for energy-efficient motors and transformers utilizing grain-oriented (GOES) and non-grain-oriented (NGOES) electrical steels. Regulatory pushes for energy efficiency and the adoption of EVs accelerated demand, though premium costs and supply chain issues presented some challenges.

Looking ahead from 2025 to 2035, market dynamics will increasingly be shaped by the pervasive global trend towards electrification. The rapid proliferation of electric vehicles, alongside advancements in smart grids, wind power technology, and innovative solid-state transformers, will be pivotal. Future materials are expected to integrate nanostructures and amorphous metal alloys, potentially enhanced by artificial intelligence in design processes, to produce lighter, more efficient, and environmentally conscious steel. The focus will also shift towards sustainable steel production methods, including hydrogen-based techniques, to align with carbon neutrality goals.

Operational and trade risks are significant, including tariffs and anti-dumping duties that affect material costs and trade flows, alongside increasingly strict environmental regulations on emissions and waste. Companies face pressure to adopt cleaner processes and improve sustainability across their operations, from sourcing to recycling, to meet investor and consumer expectations regarding Environmental, Social, and Governance (ESG) factors. Failure to adapt to these sustainability trends could result in reputational damage and financial consequences.