Electrical Steel Industry Analysis: Grades, Output and Demand

How Electrical Steel Is Classified

Electrical steel, also called silicon steel or lamination steel, is a soft magnetic material used to build cores for transformers, motors, generators and other electromagnetic devices. It is divided into two families by production process: hot-rolled electrical steel and cold-rolled electrical steel.

Cold-rolled sheets offer more uniform thickness, better surface quality and higher magnetic performance than hot-rolled sheets, so cold-rolled products have progressively replaced hot-rolled material in transformer and motor manufacture. Within the cold-rolled family, the material is further divided by internal grain orientation into grain-oriented (GO) and non-oriented (NGO) electrical steel.

Grain-Oriented vs Non-Oriented Electrical Steel

Grain-Oriented Electrical Steel (GO)

GO steel has grains aligned essentially in one direction after special rolling and annealing. Its silicon content is relatively high, and its magnetic properties are excellent in the rolling direction. It is used mainly for transformer cores, where the flux path follows a single direction. GO performance is identified by magnetic measurement after production: if the magnetic induction at 800 A/m is below about 1.88 T, the grade is classified as conventional grain-oriented steel (CGO); above 1.88 T, it is classified as high magnetic induction oriented steel (HiB).

Non-Oriented Electrical Steel (NGO)

NGO steel has randomly distributed grains and lower silicon content. Its magnetic properties are nearly isotropic, which suits rotating machines such as motors and generators where the flux direction changes continuously. NGO grades are graded mainly by iron loss at 50 Hz and 1.5 T or 1.0 T, following classification systems such as GB/T 2521 and IEC 60404-8-4.

Performance Indicators and Grade Meaning

The performance of GO steel is defined by indicators such as iron loss and magnetic induction, and is usually distinguished by grade number. The lower the loss value and the higher the magnetic induction, the better the performance and the lower the transformer power loss. Under the same capacity, a core made from higher-grade oriented steel has smaller volume and weight, saving electrical steel sheet, magnet wire and insulation materials.

Industry Output and Structure

China has become the world's largest producer and consumer of electrical steel, but the proportion of grain-oriented electrical steel within total output remains limited. In 2021, China's total electrical steel output reached 13.1828 million tonnes, of which 1.809 million tonnes were grain-oriented and 11.3819 million tonnes were non-oriented electrical steel. The ratio reflects the dominant demand from motor manufacturing, while transformer-grade GO steel continues to grow with grid investment and efficiency upgrade programmes.

Demand Drivers and Market Outlook

Transformer efficiency regulations worldwide are pushing utilities to replace older cores with low-loss HiB grades, increasing the value share of GO steel.

Renewable energy build-out, including wind and solar, adds transformers and reactors that consume oriented electrical steel.

Electric vehicle motors and industrial drives drive steady growth in high-grade non-oriented steel.

Energy storage systems and smart grid equipment create new demand for high-frequency and thin-gauge electrical steel.

Capacity expansion is concentrated in cold-rolled production lines, while hot-rolled electrical steel continues to phase out.

FAQ

1. What is the difference between CGO and HiB electrical steel?

Both are grain-oriented grades. HiB steel has magnetic induction at 800 A/m above about 1.88 T, giving lower core loss and higher permeability than CGO. HiB is preferred for low-loss and large-capacity transformers.

2. Why is grain-oriented steel used for transformers?

Transformer cores carry flux in one direction, and GO steel has its best magnetic properties along the rolling direction. This maximizes flux density, minimizes core loss and reduces transformer size.

3. What do grade numbers on electrical steel mean?

Grade numbers usually encode the guaranteed iron loss. For example, lower-numbered grades in the same series have lower loss and higher magnetic induction. Always check the standard (GB/T 2521 or IEC 60404-8) used for classification.

4. How fast is electrical steel being upgraded in the market?

The upgrade is driven by efficiency standards for distribution transformers, such as minimum efficiency performance standards in major economies, and by the expansion of renewable energy and EV production. High-grade HiB and thin-gauge products grow faster than conventional grades.

5. What is the outlook for non-oriented electrical steel?

NGO steel demand is closely tied to motor production, including EV traction motors, industrial motors and household appliance motors, which supports steady growth in high-efficiency NGO grades.

6. Where can I find reliable electrical steel output data?

Official statistics from national industry associations and government statistical bureaus, such as the annual steel output bulletins, are the primary sources. Data cited here (2021 output of 13.1828 million tonnes in China) comes from public industry statistics and should be cross-checked with the latest annual releases.