Electrical Steel Market to Reach USD 63.5 billion by 2032, Driven by EV Demand and Energy Infrastruc

Electrical Steel Market to Reach USD 63.5 billion by 2032, Driven by EV Demand and Energy Infrastructure Expansion

Electrical steel is used in a wide range of electromagnetic devices, including small relays, solenoids, electric motors, generators, and many others. Electrical steel has diverse applications in generators, electric motors, relays, solenoids, and various electromagnetic devices, all of which play crucial roles in power distribution systems and related sectors. The United States stands as the second-largest electricity generator worldwide.

Global Electrical Steel Market size was valued at USD 37.27 billion in 2023 and is poised to grow from USD 39.54 billion in 2024 to USD 63.5 billion by 2032, growing at a CAGR of 6.1% during the forecast period (2025-2032). 

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Market Overview

Despite the disruptive impact of the pandemic on global economic growth, plug-in vehicle sales surged to around 3.24 million, a remarkable increase of over 43%. Notably, Europe outpaced China to become the largest EV market, experiencing a substantial 137% growth in EV sales. This upswing in EV production directly drives the utilization of electric motors, thus boosting the demand for electrical steel. The escalating demand for electrical steel has prompted manufacturers to expand their production capacities. For instance, in May 2021, JSW Steel and JFE Steel Corporation entered into a Memorandum of Understanding (MoU) to explore the feasibility of establishing a joint venture company in India dedicated to the manufacturing and sales of electrical steel sheets within the country. The rise of electric vehicles, driven by environmental concerns and government incentives, has significantly boosted the demand for electrical steel. This material is essential for the motors and batteries in EVs, where it enhances energy efficiency and extends driving range.

Key Market Drivers

• Electric Vehicle Adoption: The surge in EV production necessitates high-performance motors, increasing the demand for electrical steel, particularly non-grain-oriented types.

• Renewable Energy Integration: The shift towards renewable energy sources like wind and solar power requires efficient transformers and generators, boosting the need for grain-oriented electrical steel.

• Infrastructure Modernization: Developing nations are investing in upgrading their power infrastructure, leading to increased consumption of electrical steel in transformers and distribution systems.

Market Segmentation

• By Type:

  • Grain-Oriented Electrical Steel (GOES): Dominates the market with a 51.7% share in 2023, primarily used in transformers.

  • Non-Grain-Oriented Electrical Steel (NGOES): Projected to experience the fastest growth, driven by its application in EV motors and generators.

• By Application:

  • Transformers: Held the largest market share at 52.0% in 2023, essential for power distribution.

  • Motors: Expected to witness significant growth due to increasing EV adoption.

• By End-User:

  • Energy & Power

  • Automotive

  • Household Appliances

  • Manufacturing

Regional Insights

• Asia-Pacific: Leads the global market, anticipated to grow at a CAGR of 5.8%. India, in particular, is investing USD 179.31 billion in its electricity sector, accounting for 44% of sales in South Asia and the Pacific.

• Europe: Expected to expand at a CAGR of 6.8%, driven by the growing automotive industry and the shift towards electric vehicles.

Key Players

Major companies in the electrical steel market include:

·       ArcelorMittal (Luxembourg) 

·       POSCO (South Korea) 

·       Voestalpine AG (Austria) 

·       China Baowu Steel Group Corporation (China) 

·       Nippon Steel Corporation (Japan) 

·       United States Steel Corporation (USA) 

·       Steel Authority of India Limited (India) 

·       TATA Steel Limited (India) 

·       Thyssenkrupp AG (Germany) 

·       JFE Steel Corporation (Japan) 

·       Shagang Group Inc. (China) 

·       Ansteel Group Corporation (China) 

·       Shandong Iron and Steel Group Co Ltd (China) 

·       NLMK Group (Russia) 

·       AK Steel Holding Corporation (USA) 

·       Baosteel Group (China) 

·       SSAB AB (Sweden) 

·       Hyundai Steel Company (South Korea) 

·       Voestalpine Stahl GmbH (Austria) 

·       Outokumpu Oyj (Finland)

These companies are focusing on strategic collaborations, technological advancements, and expanding production capacities to meet the growing demand.

Recent Developments

• In February 2024, Thyssenkrupp received an order to supply lower carbon emission grain-oriented electrical steel to Siemens Energy.

• JSW Steel and JFE Steel jointly invested Rs 5,500 crore in a steel plant in India to produce electrical grade grain-oriented steel.

• POSCO completed the initial phase of constructing its eco-friendly non-oriented electrical steel sheet plant, known as Hyper No, at Gwangyang Steel Works, aiming to cater to the increasing demand from the EV and high-end appliance sectors.

Future Outlook

The electrical steel market is poised for substantial growth, driven by the global emphasis on energy efficiency, the transition to electric mobility, and the expansion of renewable energy infrastructure. However, challenges such as high initial investment and raw material price fluctuations may impact market dynamics. Addressing these challenges through technological innovations and supportive policies will be crucial for sustained growth.

For a comprehensive analysis, refer to the full report by SkyQuest Technology: https://www.skyquestt.com/report/electrical-steel-market