Electrical Steel Market: Market Size & Forecast 2026

Electrical steel is a ferromagnetic alloy engineered to minimize energy loss during magnetic induction, making it a critical component in power transformers, electric motors, and generators. The market comprises two primary product types: grain-oriented electrical steel (GOES), used predominantly in power and distribution transformers, and non-oriented electrical steel (NOES), used in electric motors and small transformers. Global demand has grown steadily, with the market reaching approximately $26.4 billion in 2025, up from an estimated $24.8 billion in 2021 and $25.5 billion in 2024.

• •Grain-oriented steel accounts for the largest value share due to its use in power transmission infrastructure.
• •Non-oriented steel demand is rising faster due to growth in electric vehicle production and industrial motors.
• •Recyclability and material efficiency remain important factors in product specifications.

The rapid expansion of electric vehicle manufacturing is the single largest demand driver, as each EV requires significantly more electrical steel than an internal combustion engine vehicle for its traction motor. Investments in power grid modernization and renewable energy infrastructure, including wind turbines and solar panel inverters, are creating sustained demand for both grain-oriented and non-oriented electrical steel. Additionally, stricter energy efficiency regulations for electric motors and transformers are pushing manufacturers toward higher-grade electrical steel products that reduce core losses.

• •Electric vehicle sales are projected to continue rapid growth, substantially increasing per-vehicle steel content requirements.
• •Global grid upgrades and smart grid deployments require large volumes of grain-oriented electrical steel for efficient transformers.
• •Industrial motor efficiency standards, such as IEC and NEMA premium efficiency tiers, drive replacement and upgrade cycles.

By product type, the market is segmented into grain-oriented electrical steel (GOES) and non-oriented electrical steel (NOES), with GOES commanding a higher value share despite lower volume due to specialized manufacturing processes. By application, major segments include power generation and distribution, automotive (especially electric vehicles), industrial machinery, and household appliances. Geographically, Asia-Pacific dominates the market, with China representing the largest producer and consumer, followed by Japan and South Korea, while Europe and North America maintain strong demand tied to automotive and energy sectors.

• •China accounts for the majority of global electrical steel production and domestic consumption.
• •Japan and South Korea are leading exporters of high-grade grain-oriented electrical steel.
• •North America and Europe are seeing renewed investment in domestic electrical steel capacity to support EV and energy transition goals.

What are the recent trends and outlook?

Amorphous metal competitors and advanced magnetic materials are emerging as potential disruptors in certain transformer applications, though conventional electrical steel remains dominant due to cost and established supply chains. High-permeability, low-loss electrical steel grades are under active development to meet the demands of next-generation electric vehicles and compact power electronics. Over the 2025-2035 projection period, the market is expected to reach substantially higher valuations, with some estimates exceeding $98 billion by 2035, reflecting the broader electrification of transportation, industry, and power systems.

• •Next-generation EV motors are driving demand for thinner-gauge, high-performance non-oriented electrical steel to improve efficiency.
• •Grid-scale energy storage and HVDC transmission projects are creating new application areas for specialized electrical steel grades.
• •Sustainability mandates and carbon pricing are pushing producers toward lower-emission manufacturing processes and recycled-content steel.