Electrical Steel Market Synopsis

Electrical Steel Market Size Was Valued at USD 29.87 Billion in 2023, and is Projected to Reach USD 46.74 Billion by 2032, Growing at a CAGR of 5.1% From 2024-2032.

Electrical steel, also known as silicon steel or transformer steel, is a specialized material crucial for electromagnetic devices like motors, generators, and transformers due to its ability to minimize power loss. It possesses enhanced electrical properties and is widely used in applications ranging from small relays to electric motors.

• This ferromagnetic material is primarily composed of iron with varying silicon (Si) content, typically between 1% and 6.5%. The addition of silicon enhances resistivity, improves permeability, and reduces hysteresis loss, making it ideal for applications in electrical power distribution and automotive industries.
• The development of electrical steels stemmed from the need to mitigate heat dissipation in electrical devices, thereby reducing energy wastage. Initially, iron was chosen for its cost-effectiveness, but its impurities posed challenges. Commercially available electrical steels typically contain around 3.25% silicon, as higher silicon content can render the material too brittle for effective cold rolling processes.
• Electrical steel containing 6.5% silicon offers the most optimized magnetic and electrical characteristics, though its brittleness and limited ductility necessitate additional thermomechanical treatments for practical use.
• This ongoing refinement process continues to ensure that electrical steel meets the stringent demands of modern electromagnetic applications, contributing significantly to energy efficiency and performance across various industrial sectors.

Top Key Players:

 "ArcelorMittal (Luxembourg), POSCO (South Korea), Voestalpine AG (Austria), China Baowu Steel Group (China), Nippon Steel Corporation (Japan), United States Steel Corporation (United States), Steel Authority Of India (India), TATA Steel Limited (India), Thyssenkrupp AG (Germany), JFE Steel Corporation (Japan), Benxi Steel Group Co., Ltd (China), CSC Steel Sdn. Bhd. (Malaysia), Nucor Corporation (U.S.), NLMKs (Russia), Shougang Group (China), Baosteel Group Corporation (China), Yieh Corporation (Taiwan), Aperam S.A. (Luxembourg), Arnold Magnetic Technologies (U.S.), Cleveland-Cliffs Corporation (U.S.), Slovenian Steel Group (Slovenia), Hu (China), Cleveland-Cliffs Inc. (U.S.), JFE Holdings, Inc. (Japan) and Other Major Players"

Market Trend Analysis

Expansion in Power Infrastructure

• The growth of power infrastructure, particularly in the field of electrical steel, is crucial due to increasing global electricity demands. Electric steel is essential in the effective transfer and distribution of electricity due to its magnetic properties and minimal core loss.
• The increasing demand for dependable transformers and generators that utilize electrical steel to improve efficiency and minimize energy loss during power conversion is driven by developments in renewable energy sources such as wind and solar.
• There has been a sharp increase in the need for electrical steel due to the fast-paced urbanization and industrial growth in developing countries. Nations such as China and India are making significant investments in enhancing their power systems to address increasing energy demands, providing major prospects for electrical steel producers.
• Manufacturers in the electrical steel market are increasingly focused on enhancing performance and sustainability through the development of new alloys and production techniques driven by technological advancements.
• These developments strive to improve the magnetic characteristics of electrical steel to better cater to the needs of future power infrastructure requiring increased efficiency and dependability. The increased global investment in smart grids and renewable energy projects is anticipated to sustain a strong demand for high-grade electrical steel, leading to industry innovation and growth.

Increasing Investments in Wind and Solar Energy

• The Electrical Steel Market is set to expand due to growing investments in sustainable energy sources such as wind and solar power. These industries depend greatly on electrical steel for the effective conveyance and dispersal of electricity.
• Silicon steel, also called electrical steel or lamination steel, is important because of its magnetic characteristics that reduce energy waste in power transmission. Due to worldwide initiatives for sustainability and carbon footprint reduction, there will be a significant increase in the demand for electrical steel.
• Renewable energy initiatives, especially wind and solar farms, need large amounts of electrical steel for their generators, transformers, and transmission lines. With governments around the world focusing on renewable energy goals and benefits, the need for electrical steel in these uses is projected to experience strong growth.
• The growth of electric vehicle (EV) manufacturing also contributes to the positive impact on the Electrical Steel Market. With the move towards electric vehicles in the automotive sector, there is an increasing demand for electrical steel in EV motors and charging infrastructure. This trend is increasing the market's potential for growth beyond traditional energy uses, opening up new opportunities for innovation and investment in the production of electrical steel.
• The combination of sustainable energy efforts, electric vehicle usage, and technological progress offers a hopeful chance for the Electrical Steel Market. Businesses producing electrical steel are in a prime position to take advantage of these trends by increasing production capacity, enhancing product quality, and growing their global market presence.

Electrical Steel Market Segment Analysis:

Electrical Steel Market Segmented on the basis of Type, Application, and End-users.

By Application, Transformers segment is expected to dominate the market during the forecast period

• Electrical steel plays a pivotal role in the transformers segment of the electrical industry, driven by its exceptional magnetic properties. These properties, including low hysteresis loss and high permeability, make electrical steel ideal for transformer cores. These cores efficiently intensify magnetic fields, crucial for enhancing the performance and efficiency of electrical transformers.
• Electrical steel finds extensive application beyond transformers, particularly in the production of motor cores. These cores enhance electromagnet strength by focusing magnetic fields, thus optimizing motor efficiency.
• The electrical steel is integral to manufacturing inductor cores used with capacitors and resistors in analog circuit filters and signal processing applications. This versatility underscores electrical steel's critical role in diverse electrical devices where superior magnetic performance is paramount.
• The rising global demand for electricity further amplifies the significance of electrical steel in modern energy infrastructure. Its ability to support efficient power transmission and distribution through transformers underscores its foundational role in advancing electrical engineering capabilities worldwide.
• As technology continues to evolve, electrical steel remains essential for innovating next-generation electrical devices that require robust magnetic properties for optimal performance and reliability.

By End-User, Manufacturing segment held the largest share of 42.45% in 2023

• The manufacturing industry has a significant impact on the leadership of the electrical steel market. Silicon steel, also called electrical steel or lamination steel, is essential for creating electrical devices because of its magnetic characteristics. These characteristics make it perfect for use in transformers, electric motors, and generators, which are vital components in various industries.
• The increasing demand for electrical steel is fueled by the rise in worldwide infrastructure construction and urbanization, which in turn boosts the requirement for electrical infrastructure such as power distribution networks and renewable energy systems. This increase in infrastructure development projects drives up the need for transformers and other electrical devices, pushing the electrical steel industry ahead.
• The improvements in manufacturing techniques have greatly increased the quality and productivity of producing electrical steel. Continuous casting and enhanced annealing technology have allowed manufacturers to create electrical steel with increased magnetic permeability and lower energy losses, meeting strict industry requirements and fueling market expansion.
• The move of the automotive industry towards electric vehicles (EVs) is a significant factor driving the electrical steel market. Electric vehicles depend greatly on effective electric motors, which necessitate specialized electrical steel for their cores. This shift has encouraged investments in the production capacity of electrical steel, especially in regions that are at the forefront of electric vehicle (EV) uptake such as Europe, North America, and Asia-Pacific.

Electrical Steel Market Regional Insights:

Asia Pacific is Expected to Dominate the Market Over the Forecast period

• The Asia-Pacific (APAC) region stands as a dominant force in the global Electrical Steel Market, driven by rapid industrialization, urbanization, and infrastructure development across countries like China, India, Japan, and South Korea. These nations are pivotal due to their robust manufacturing sectors, increasing demand for energy, and expanding automotive industries.
• China leads the charge with its massive manufacturing base and substantial investments in renewable energy infrastructure, bolstering demand for electrical steel used in transformers and motors. India follows closely, spurred by initiatives like Make in India, which encourage domestic production and infrastructure growth, thereby augmenting demand for electrical steel.
• Japan, renowned for its technological prowess and automotive innovations, contributes significantly to the market with its advanced electrical steel products used in efficient motor and transformer designs. South Korea's strong electronics sector further enhances the APAC region's leadership, driven by the demand for high-performance electrical steel in various consumer electronics and automotive applications.
• APAC's dominance in the Electrical Steel Market reflects its economic dynamism, technological advancement, and strategic focus on sustainable energy solutions, positioning the region as a key player in shaping the future of global electrical steel demand and innovation.

From 2019 to 2023, India's production volume of crude steel showed fluctuating trends. In 2019, production stood at 110.92 million metric tons (MMT) and decreased slightly to 108.5 MMT in 2020. The following year, production declined further to 102.49 MMT amidst global economic challenges. However, by 2022, there was a significant recovery, with production rising sharply to 120.01 MMT, marking a recovery and growth phase. In 2023, production continued to increase to 125.32 MMT, reflecting robust demand and industrial resilience. This growth has implications for the electrical steel market, which relies heavily on steel production volumes for manufacturing electrical transformers and related equipment, benefiting from increased availability and potentially lower costs due to higher production outputs

Active Key Players in the Electrical Steel Market

• ArcelorMittal (Luxembourg)
• POSCO (South Korea)
• Voestalpine AG (Austria)
• China Baowu Steel Group (China)
• Nippon Steel Corporation (Japan)
• United States Steel Corporation (United States)
• Steel Authority Of India (India)
• TATA Steel Limited (India)
• Thyssenkrupp AG (Germany)
• JFE Steel Corporation (Japan)
• Benxi Steel Group Co., Ltd (China)
• CSC Steel Sdn. Bhd. (Malaysia)
• Nucor Corporation (U.S.)
• NLMK (Russia)
• Shougang Group (China)
• Baosteel Group Corporation (China)
• Yieh Corporation (Taiwan)
• Aperam S.A. (Luxembourg)
• Arnold Magnetic Technologies (U.S.)
• Cleveland-Cliffs Corporation (U.S.)
• Slovenian Steel Group (Slovenia)
• Hu (China)
• Cleveland-Cliffs Inc. (U.S.)
• JFE Holdings, Inc. (Japan) and Other Major Players

Key Industry Developments in the Electrical Steel Market:

In April 2024, The acquisition of United States Steel by Nippon Steel was approved by U.S. Steel’s stockholders. Nippon Steel was confident that the acquisition would protect and grow U.S. Steel, bringing significant benefits to its stakeholders, including customers, employees, union workers, suppliers, communities, and stockholders, as well as to the American steel industry and the United States as a whole. The vote yesterday represented a major step toward achieving this goal.

In February 2024, JSW Steel and JFE Steel established a joint venture in India as announced in a recent stock exchange disclosure. The companies invested 55 billion rupees (approximately $663 million) to establish a plant in Karnataka. Production was scheduled to commence in the fiscal year 2026/2027, aimed at expanding capacity to meet the rising demand for grain steel in India. Grain steel serves as a fundamental material in various applications, notably as a base material in transformers.