Powering the energy transition: Supply shortage of electrical steel could crimp energy transition movement

The green revolution is creating a surge in demand for electrical steel, a key component in both electric vehicles (EVs) and new home appliances

The push for cleaner energy is supercharging the electric vehicle (EV) market with Asia in the driver’s seat. This is also pushing up demand for electrical steel.

Asia’s green machine

Asia is now the main center of electric vehicle production, with China the clear market leader in production and sales.

China has made new energy vehicles like electric cars and hybrids one of its seven strategic emerging industries and has rolled out a bunch of policies to support the development of new energy vehicles and their supply chains, focusing on supporting the localization of parts and components with higher technical barriers to replacement.

Asia also has the highest penetration rates of electric vehicles, according to the International Energy Agency.

In 2023, China leads sales share of new electric vehicles at 38%, compared to Germany and United Kingdom both at 24% and France at 25%. The United States has a penetration rate of 9.5%. Other countries in Asia are lagging, with South Korea at 7.9%, Japan at 3.6% and India at 2%.

The low penetration rates globally point to a staggering potential for uptake in electric vehicle usage, and coupled with a relatively small number of electrical steel producers around the world, there exists the likelihood that electrical steel will be in tight supply in the future. 

According to IEA electrical vehicle data, the global electric vehicle fleet is set to grow twelve-fold by 2035, from 45 million in 2023 to 250 million in 2030 and 525 million in 2035. This means more than one in four vehicles on the road will be electric.

China is expected to surpass 50% electric car sales share as early as 2025, while Europe is expected to see 85-90% EV sales share by 2035. The US is expected to see more than 70% EV sales share by 2035 due to supportive policies. India is expected to reach 50-60% EV sales share by 2035.

While major steelmakers around the world are also actively investing in expanding their high-grade non-oriented electrical steel production capacity. For example, JFE Steel tying up with Indian steelmaker JSW Steel to produce electrical steel in Karnataka, it may not be sufficient to keep pace with projected global demand.

New price launches in Asia for China, India electrical steel prices

It is against this backdrop that Fastmarkets is launching new electrical steel prices for the China domestic and India import markets, amid rising calls from market participants for more price transparency into this growing market. Find out more about our electrical steel prices.

What to read next
The publication of Fastmarkets’ Turkish steel scrap import indices was delayed on Wednesday April 2 because of a technical fault. Fastmarkets’ pricing database has been updated. The following prices were affected: MB-STE-0416 Steel scrap HMS 1&2 (80:20 mix) North Europe origin, cfr Turkey, $/tonne MB-STE-0417 Steel scrap HMS 1&2 (80:20 mix) US origin, cfr Turkey, […]
The publication of Fastmarkets’ iron ore DR-grade pellet premium, quarterly contract was delayed due to a reporter’s error. Fastmarkets’ pricing database has been updated. The MB-IRO-0077 Iron ore DR-grade pellet premium, quarterly contract was published on Wednesday April 2 – the second working day of the quarter, while usually it is published on the first […]
In the second of a two-part series, Fastmarkets looks at opportunities for the Asia ferro-alloys sector that could result from US-China trade tensions or against a backdrop of greater trade protection, ahead of the Asia Ferroalloys 2025 Conference
The 2025 executive order on U.S. mineral production is a major step toward strengthening domestic supply chains and national security. By boosting domestic mineral production, it aims to reduce reliance on imports and ensure a secure future for critical industries. This order will shape the future of U.S. mining and its role in global markets.
The United States is taking steps to strengthen its critical mineral supply. This move focuses on boosting domestic production, improving supply chains, and addressing regulatory challenges. These efforts aim to enhance economic growth and reinforce national security.
This consultation, which is open until April 28, 2025, seeks to ensure that our methodologies continue to reflect the physical market, in compliance with the International Organization of Securities Commissions (IOSCO) principles for Price Reporting Agencies (PRAs). This includes all elements of our pricing process, our price specifications and publication frequency. You can find the […]