Electrical Steel Market worth $83.23 billion by 2031, at 5.8%, says MarketsandMarkets™

Delray Beach, FL, (ZM  NEWSWIRE) — In terms of value, the Electrical Steel Market projected to grow from USD 62.93 billion in 2026 to USD 83.23 billion by 2031, representing a compound annual growth rate (CAGR) of 5.8% during the forecast period, as per the recent study by MarketsandMarkets™. Electrical steel is a specialized steel engineered to deliver excellent magnetic performance and is typically used in electromagnetic applications such as transformers, motors, and generators. Electrical steel is made by combining silicon with iron (steel) and is processed using advanced rolling and annealing techniques to provide low core loss, high permeability, and improved energy efficiency. Electrical steel can be divided into two categories: grain-oriented and non-grain-oriented. Each type has specific application requirements based on the requirements of directionally or isotropically operating magnetic field performance. Usually, electrical steel is manufactured as very thin sheets and/or coils to reduce energy losses associated with eddy currents. The use of electrical steel extends across the energy, automotive, and industrial sectors, making it essential to the production of electrical power, transmission of electrical power, and electric mobility. The properties of electrical steel are improved through both precision processing and coating technologies, so that electrical steel is vital to the creation of high-efficiency, low-loss electrical systems in today’s infrastructure.

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List of Key Players in Electrical Steel Market:

1. ArcelorMittal (Luxembourg),
2. POSCO (South Korea),
3. China Baowu Steel Group Corporation Limited (China),
4. voestalpine AG (Austria),
5. Nippon Steel Corporation (Japan),
6. United States Steel Corporation (US),
7. Steel Authority of India Limited (SAIL) (India),
8. Tata Steel (India)
9. Thyssenkrupp AG (Germany)

Drivers, Opportunities and Challenges in Electrical Steel Market:

1. Drivers: Abundance of Iron Ore and Other Minerals for Electrical Steel Production
2. Restraint: Energy-Intensive Processing with Rising Decarbonization Pressure.
3. Opportunity: Expansion into EV-Specific NGO Steel Grades.
4. Challenge: Achieving Ultra-Low Core Loss at High Frequencies.

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Key Findings of the Study:

1. By type, the grain-oriented electrical steel segment accounted for the fastest CAGR during the forecasted period.
2. By application, the transformers segment recorded the fastest CAGR during the forecast period.
3. By end-use industry, the energy segment accounted for the fastest CAGR during the forecast period.
4. The Middle East & Africa region recorded the highest CAGR during the forecast period.

By type, the grain-oriented electrical steel segment accounted for the fastest CAGR during the forecasted period. The Grain-Oriented Electrical Steel (GOES) segment is expected to register the fastest CAGR during the forecast period due to growing requirements for high-efficiency power transformers, due to a modernizing and expanding grid. GOES has been specifically manufactured to provide greater alignment of magnetic flux along a single axis, which dramatically reduces core losses in both transmission and distribution transformers.   Investment in renewable energy, where efficient, long-distance transmission/transportation is essential, is driving growth in the more advanced grades of GOES. Additionally, in developed economies, high-efficiency transformers are replacing aging current transformers. Also, in developing economies, the increasing use of electricity as more consumers gain access is boosting demand for GOES transformers. Developmental innovations in coatings and refinement processes for GOES have improved performance, establishing GOES as one of the most important materials for next-generation energy systems.

By application, the transformers segment recorded the fastest CAGR during the forecast period. The transformers segment is expected to register the fastest CAGR during the forecast period, driven by increasing demand for grid expansion, renewable energy integration, and cross-border power transmission systems. As electricity consumption continues to rise and energy systems become increasingly decentralized, utilities are installing more advanced and efficient transformers made from high-quality electrical steel to reduce core losses and improve load management. Moreover, the increasing complexity of power flows due to intermittent renewable resources has created a strong need for transformers that are more reliable and high performing. The replacement of aging grid infrastructure in developed nations, as well as electrification and rural connectivity projects in developing countries, are also substantially driving up demand. The combination of these trends will drive significant growth in the use of electrical steel in the transformer product segment.

By end-use industry, the energy segment accounted for the fastest CAGR during the forecast period. The energy sector is anticipated to experience the fastest CAGR during the forecast period due to the drastic transition towards low-carbon and electrified infrastructures occurring within the worldwide electrical systems. A growing number of investments will be made in renewable energy projects, including wind and solar, thereby creating high demand for high-voltage electrical steels for use in generators, transformers, and grids. A growing need exists to manage variable power generation and maintain grid stability; therefore, manufacturers are advancing their production of next-generation electrical products with superior magnetic properties. In addition, demand for electricity is increasing due to the expansion of transmission networks, the electrification of rural communities, and the integration of large-scale energy storage. As countries work towards improving energy efficiency and meeting decarbonization targets, the electrical steel industry will grow quickly compared with other global industries (electricity has about 1/3 of the average total sales of other manufacturing industries).

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The Middle East & Africa region recorded the highest CAGR during the forecast period. The Middle East & Africa region is expected to register the fastest CAGR during the forecast period, driven by rapidly increasing investment in all types of power infrastructure, grid expansion, and electrification initiatives. A major contributor to this increase in demand for electricity, and therefore the construction of new transmission and distribution systems, is the overall growth and urbanization of the population, which requires transformer equipment made from electrical steel. In addition, the growth of large-scale renewable energy projects (solar/wind) is generating significant demand for efficient grid integration and creating opportunities for new methods to reduce transmission losses and improve energy efficiency in the country, all of which are driving demand for new electrical steel grades. The ongoing growth of industrialization and the diversification of economies away from oil will continue to support the long-term growth of the Middle East and Africa as an emerging market for all types of electrical steels.

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