Anticipated expansion of Electrical Steel Market valued at approximately USD 50.8 billion by the year 2034
The global electrical steel market is poised for significant growth in the coming years, with a projected compound annual growth rate (CAGR) of 4.9% during the forecast period, reaching USD 50.8 billion by 2034. This growth is expected to accelerate further, achieving a CAGR of around 7.1% to 7.2% between 2024/25 and 2034, according to various sources.
Key factors driving this growth include the rising production of electric vehicles (EVs), which increases demand for electrical steel used in motors and transformers to enhance energy efficiency and reduce losses. The transition towards smart grid upgrades and industrial electrification, as industries move away from fossil fuels to meet sustainability and decarbonization goals, is another significant growth driver.
The expanding use of electrical steel in transformers, motors, and generators across various sectors such as energy, transportation, and industrial machinery underpins sustained demand for both grain-oriented and non-grain-oriented electrical steel. Technological advancements and government policies accelerating energy-efficient infrastructure and renewable energy integration also contribute to the market's growth.
Strong infrastructure growth, particularly in the Asia-Pacific region, supported by urbanization, industrial growth, and government investment in energy and transportation infrastructure, is another key driver. However, challenges such as raw material price volatility and capital-intensive manufacturing do not significantly constrain the overall growth prospects.
Asia Pacific commands the largest market share at 72.3%, valued at around USD 22.6 billion. The region's dominance in the global electrical steel market continues, with industrial growth and EV production in countries like China, Japan, and India being key drivers.
In Europe, the market is driven by automotive demand and green policies, with Germany, France, and the UK leading. North America is experiencing steady growth due to EV adoption and energy-efficient motors, supported by major manufacturers. The Middle East & Africa and Latin America are smaller but growing markets, thanks to energy projects and rising EV use.
Notable developments in the market include SAIL's partnership with John Cockerill to invest Rs 6,000 crore to establish a new electrical steel plant in India in 2025. JSW Steel and JFE Steel announced a $669 million investment in India to expand electrical steel production capacity in 2025. ArcelorMittal will invest $1.2 billion in Mobile County, Alabama, to build an advanced manufacturing facility producing specialty electrical steel in 2025.
In India, JSW Steel and JFE Steel formed a joint venture worth ₹5,500 crore to produce electrical steel in 2024. The transformer segment led the market with a 52.6% share in 2024. Non-grain Oriented (NGO) electrical steel held a dominant 71.3% market share in 2024.
Renewable energy projects drive demand for electrical steel in wind turbines and solar inverters. Advanced manufacturing improves electrical steel quality, reducing energy losses. The growth of the global electrical steel market up to 2034 is expected to be primarily driven by ev-related demand, industrial electrification for sustainability, smart grid modernization, and infrastructure expansion.
- The manufacturing industry, particularly in the Asia-Pacific region, is witnessing significant growth due to government investment in energy and transportation infrastructure, which is driving the demand for electrical steel.
- The global electrical steel market is expected to experience a surge in growth as technology advances, enabling improved electrical steel quality and reducing energy losses, thus contributing to energy-efficient infrastructure.
- Investing in the real-estate sector and business ventures, such as the joint venture between JSW Steel and JFE Steel in India to produce electrical steel, are strategic moves in response to the growing demand for this essential component.
- Financing projects in the energy sector, like the SAIL-John Cockerill partnership for a new electrical steel plant in India, and expansions in electrical steel production capacity, as seen with JSW Steel and JFE Steel in India, will play a crucial role in meeting the escalating demand for electrical steel.
