The Grain Oriented Electrical Steel (GOES) Market is witnessing a robust growth trajectory, fueled by rising global electricity demand, modernization of power transmission infrastructure, and increasing adoption of energy-efficient electrical equipment. Grain oriented electrical steel is a critical material used in the production of transformers, reactors, and large electric machines, thanks to its superior magnetic properties and low core loss characteristics. As the world transitions toward greener and more sustainable energy systems, the demand for high-performance electrical steels continues to surge.
Global Grain Oriented Electrical Steel Market size and share is currently valued at USD 13.02 billion in 2024 and is anticipated to generate an estimated revenue of USD 22.71 billion by 2034, according to the latest study by Polaris Market Research. Besides, the report notes that the market exhibits a robust 5.7% Compound Annual Growth Rate (CAGR) over the forecasted timeframe, 2025 - 2034
Market Overview
Grain oriented electrical steel is a special type of silicon steel that is processed to align the grains in the rolling direction, significantly enhancing its magnetic properties and reducing energy losses. It is primarily used in applications requiring low core loss and high magnetic permeability, such as power transformers, distribution transformers, and small transformers used in various electrical equipment.
GOES is categorized mainly into Conventional Grain Oriented (CGO) and High Permeability Grain Oriented (HiB GOES) types. High permeability GOES is gaining traction due to its better magnetic performance, especially in advanced and compact transformer designs.
The increasing focus on energy conservation, coupled with stringent efficiency standards in power equipment, is driving the adoption of GOES across power utilities and transformer manufacturers globally.
Key Market Growth Drivers
1. Expansion of Transmission and Distribution (T&D) Infrastructure
One of the primary drivers of the GOES market is the growing investment in power transmission and distribution networks. As urbanization and industrialization escalate in both developed and emerging economies, the demand for efficient and reliable power infrastructure is soaring. Governments and private sector players are investing in the expansion and upgrade of grid systems, which in turn boosts the demand for energy-efficient transformers—the primary application of GOES.
Smart grid development, especially in North America, Europe, and parts of Asia, is creating significant opportunities for the GOES market.
2. Rising Adoption of Renewable Energy Sources
The global shift towards renewable energy such as wind and solar is leading to increased demand for transformers to integrate variable power sources into the grid. GOES is a key component in these transformers, offering minimal energy losses during voltage conversion and transmission.
With countries aiming to meet their net-zero carbon targets, the deployment of solar farms and wind turbines is increasing rapidly, thereby driving the market for GOES as it ensures high energy conversion efficiency and reduces operational costs in green energy projects.
3. Increasing Demand for Energy-Efficient Transformers
Energy efficiency regulations are becoming more stringent worldwide. Regulatory frameworks such as the EU Ecodesign Directive, U.S. Department of Energy (DOE) efficiency standards, and similar mandates in Asia-Pacific are enforcing minimum energy performance standards (MEPS) for transformers and electrical machines.
This push for energy-efficient systems directly increases the demand for high-performance materials like GOES that can meet these efficiency standards. Manufacturers are increasingly opting for high permeability GOES to ensure compliance and improve performance.
4. Urbanization and Industrial Electrification
Rapid urbanization and electrification of industrial operations are significantly boosting the demand for distribution transformers. In smart cities and urban clusters, where energy needs are dynamic and space constraints exist, compact and high-efficiency transformers made from GOES are highly preferred.
Emerging markets such as India, Southeast Asia, and Africa are witnessing substantial grid expansion, paving the way for increased consumption of grain oriented electrical steel.
Market Challenges
Despite the favorable growth outlook, the GOES market faces a number of challenges:
1. High Manufacturing Costs
The production of grain oriented electrical steel involves complex and energy-intensive processes such as cold rolling, annealing, and grain alignment. These processes require specialized equipment and technologies, which contribute to higher production costs compared to non-oriented electrical steel (NOES).
This cost barrier can be a challenge for smaller transformer manufacturers and price-sensitive markets.
2. Limited Raw Material Availability
The primary raw materials for GOES, including iron ore and specific alloys like silicon, are subject to price fluctuations and supply chain volatility. Disruptions in the global supply chain, as seen during the COVID-19 pandemic and geopolitical tensions, can impact production and availability.
In addition, only a limited number of companies globally possess the technology and capability to produce high-grade GOES, which can lead to monopolistic pricing and supply constraints.
3. Substitution by Alternative Materials
Although GOES is the preferred choice for high-efficiency transformers, advances in materials science have led to the development of amorphous metal cores, which offer even lower core losses. While still more expensive and limited in adoption, these materials could pose a competitive threat to the GOES market in the long term.
4. Environmental Regulations on Steel Manufacturing
Steel manufacturing is a carbon-intensive process, and the increasing environmental regulations on emissions and resource consumption are impacting the entire supply chain. Producers of GOES must invest in cleaner and more sustainable production methods, which may increase operational costs and influence pricing structures.
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Regional Analysis
North America
North America represents a significant share of the GOES market, driven by a mature power infrastructure, early adoption of smart grids, and regulatory focus on energy efficiency. The U.S. is a leading market in this region, with consistent demand from utility providers and industrial sectors.
Ongoing replacement of aging transformers and grid modernization projects further support market growth.
Europe
Europe is also a strong market, characterized by stringent energy efficiency standards and a well-established renewable energy sector. Countries like Germany, France, and the UK are actively upgrading their electrical infrastructure to align with green energy targets, boosting the demand for high-grade GOES.
Moreover, the European Union’s push towards reducing carbon emissions and improving transformer performance standards is propelling the adoption of energy-efficient materials.
Asia Pacific
Asia Pacific is expected to witness the fastest growth in the GOES market, owing to rapid urbanization, industrial growth, and massive investments in energy infrastructure. China, Japan, India, and South Korea are leading contributors to this growth.
China, in particular, dominates both production and consumption of GOES, thanks to its large-scale transformer manufacturing base and government initiatives to improve energy efficiency in grid systems.
Latin America and Middle East & Africa
These regions are gradually emerging as growth markets for GOES, supported by increasing electrification, economic development, and foreign investments in power infrastructure. However, the adoption pace is slower due to financial constraints and limited local production capacity.
Key Companies in the Market
- ArcelorMittal
- Arnold Magnetic Technologies
- Baosteel Group Corporation
- Cleveland-Cliffs Inc.
- JFE Steel Corporation
- NIPPON STEEL CORPORATION
- POSCO
- Stalprodukt S.A.
- thyssenkrupp Steel
- VIZ-Steel
Conclusion
The Grain Oriented Electrical Steel Market is at the center of the global transition toward smarter, greener, and more efficient power systems. As the demand for electricity continues to grow and regulatory frameworks emphasize energy efficiency, GOES will play a pivotal role in enabling the next generation of transformers and electrical equipment.
While challenges related to cost, raw material supply, and emerging alternatives exist, the continued modernization of power infrastructure and the rising focus on sustainable energy ensure a positive outlook for the market.
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