Electrical Steel Upgrades Quality and Performance Amid Market Clearing Acceleration

8 Ağustos 2026 Blog

1. Industry Overview: High-end Transformation Amid Structural Overcapacity

In the first year of China’s 15th Five Year Plan, the domestic electrical steel industry is undergoing comprehensive transformation toward high-end, intelligent, and green development. Product upgrading has become the core development trend, with mainstream products evolving toward thinner specifications, lower iron loss, and higher magnetic induction to meet the demand of high-efficiency energy equipment and emerging new energy industries.

However, the rapid expansion of market demand has driven the continuous commissioning of new domestic electrical steel projects, leading to prominent industry challenges including overall oversupply, structural surplus, and intensified internal market competition. The low-end production capacity represented by conventional grain-oriented (CGO) electrical steel and medium-to-low grade non-oriented electrical steel has become the main drag on high-quality industry development. Therefore, capacity reduction and quality upgrading, as well as accelerated elimination of backward production capacity, have been defined as the primary tasks of the current electrical steel industry.

For years, China has implemented strict total capacity control on iron and steel smelting processes to guide the high-quality development of the steel industry. Nevertheless, rolling processes and finished products including electrical steel adopt market-oriented regulation mechanisms. The overcapacity problem of the electrical steel industry is mainly resolved through market competition, industry standard constraints, quality supervision, and capacity utilization rate monitoring.

Fortunately, the electrical steel industry achieved notable positive changes in the first half of 2026. The product structure was significantly optimized, and the output of low-end products decreased substantially, marking solid progress in industrial structural upgrading. This report systematically analyzes the operational performance, market price trends, import and export patterns, and future development prospects of China’s electrical steel industry in H1 2026.

2. H1 2026 Industry Operational Performance

2.1 Overall Production Data & Structural Optimization

In the first half of 2026, China’s total electrical steel output reached 9.2943 million tons, a year-on-year increase of 6.25%. The industry maintained production growth while realizing continuous structural optimization, with high-end product output rising rapidly and low-end product capacity shrinking steadily.

Non-oriented electrical steel output hit 7.524 million tons, up 4.99% year-on-year, showing obvious structural differentiation:

High-grade non-oriented electrical steel: 2.5951 million tons, accounting for 34.49% of the total, a year-on-year increase of 5.92%. Among them, output of special electrical steel for new energy vehicles reached 806,000 tons, surging 21.15% year-on-year, becoming the core growth driver of high-end products.
Medium and low-grade non-oriented electrical steel: 4.9289 million tons, accounting for 65.51% of the total, a year-on-year increase of only 4.51%, with growth momentum continuing to weaken.

Grain-oriented electrical steel output totaled 1.7703 million tons, a year-on-year increase of 11.97%, with a prominent high-end upgrading trend:

High magnetic induction oriented (HiB) electrical steel: 1.3591 million tons, occupying 76.77% of the oriented steel market, a sharp year-on-year increase of 27.48%.
Conventional grain-oriented (CGO) electrical steel: 411,300 tons, accounting for only 23.23% of the market, a year-on-year decrease of 20.14%, reflecting the accelerated substitution of low-end oriented steel by high-end HiB products.

2.2 Enterprise Production Pattern & Industry Shuffle

In H1 2026, 27 enterprises operated non-oriented electrical steel production lines, with Baosteel Group, Shougang Zhixin, Shagang Iron and Steel, Angang Steel, and Yima Group ranking the top 5 in total output. The fastest production growth was recorded by Hongwang Holdings, Puyang Iron and Steel, Baosteel Group, Zhejiang Hunan New Materials, and Taiyuan Iron and Steel. In terms of market changes, Fujian Sanbao (Kebao) completed and put into operation its non-oriented production line within six months, officially entering the silicon steel industry, while Zhaoqing Hongwang under Hongwang Holdings suspended production.

For oriented electrical steel, 24 enterprises maintained production in H1 2026. The top 5 output enterprises were Baosteel Co., Ltd., Shougang Zhixin, Hongwang Holdings (Hunan Hongwang), Putian Iron Core (Xinpu Electric), and Chongqing Wangbian. Liangang Electromagnetic, Fujian Auckland, Tangshan Shouyu, Taiyuan Iron and Steel, and Fujian Xinwanxin achieved the most rapid production growth.

The industry witnessed accelerated reshuffling and integration: Ningbo Yinyi and Jiangyin Senhao suspended production in H1 2026, Wuxi Jinglong halted production in June, while Shanxi Liguo and Zhejiang Huaying actively promoted merger and acquisition restructuring, further raising industry concentration.

2.3 Hot-rolled Substrate Supply Structure Upgrade

In H1 2026, China’s hot-rolled electrical steel substrate output reached 898,400 tons, a year-on-year increase of 11.85%. The supply structure of raw materials fully reflected the industry’s high-end transformation trend:

HiB hot-rolled substrate output: 431,800 tons, up 52.58% year-on-year, with explosive growth.
CGO hot-rolled substrate output: 466,600 tons, down 10.30% year-on-year.
Medium and low-grade non-oriented hot-rolled substrate output: 696,200 tons, down 27% year-on-year.

The substantial growth of high-end substrates and the continuous decline of low-end substrates verify that China’s electrical steel industry is accelerating the upgrade of semi-finished products and eliminating backward low-end production capacity.

2.4 Import & Export and Apparent Consumption Data

2.4.1 Import and Export Volume Changes

In H1 2026, China’s electrical steel imports and exports both declined, affected by tightened external trade environment and domestic structural adjustment:

Imports: Total imports stood at 63,800 tons, down 16.57% year-on-year. Oriented steel imports decreased 17.15% to 39,000 tons; non-oriented steel imports fell 15.64% to 24,800 tons, reflecting accelerated domestic import substitution.
Exports: Total exports reached 717,100 tons, down 6.37% year-on-year. Oriented steel exports rose slightly by 0.48% to 395,100 tons; non-oriented steel exports dropped 13.59% to 322,000 tons, showing obvious structural export differentiation.

2.4.2 Apparent Consumption and Capacity Utilization

China’s apparent consumption of electrical steel in H1 2026 was 8.61 million tons, up 6.74% year-on-year, with structural supply-demand differentiation:

Oriented electrical steel: Apparent consumption of 1.3742 million tons (up 11.27% YoY), 396,100 tons lower than actual output, with a capacity utilization rate of 95%.
Non-oriented electrical steel: Apparent consumption of 7.2268 million tons (up 5.92% YoY), 297,200 tons lower than actual output, with a capacity utilization rate of 82%.

Overall, the oriented electrical steel industry maintained high capacity utilization, while the non-oriented sector faced prominent structural overcapacity pressure.

3. H1 2026 Electrical Steel Market & Price Analysis

3.1 Oriented Electrical Steel: Oscillating Upward with Structural Prosperity

The oriented electrical steel market presented a typical ice-fire dual pattern in H1 2026, with obvious structural differentiation between high-end HiB and low-end CGO products. Driven by new energy grid integration, transformer energy efficiency upgrading policies, and high-end equipment demand, the market accelerated the replacement of CGO by HiB products.

The market share of HiB electrical steel jumped from 67% in H1 2025 to 77% in H1 2026, while CGO’s market space shrank sharply. Full-process enterprises such as Baosteel, Shougang, Taiyuan Iron and Steel, and Ansteel relied on technological and equipment advantages to achieve output growth. A number of semi-process enterprises successfully deployed HiB production lines to seize high-end market shares. In contrast, nearly 75% of semi-process enterprises focusing on CGO products suffered output declines due to backward technology and sluggish market demand.

In terms of prices, mainstream HiB products represented by 23RK080 rose from 11,200 yuan/ton at the start of the year to 12,100 yuan/ton in mid-June, with a cumulative increase of 8%. High-end grades showed strong price elasticity: B30P120 increased by 10.31% and B23R085 by 9.8%. However, low-end CGO products such as 27QG120 only rose 7.07%, with some conventional grades struggling to maintain price growth, forming a “high-end strong, low-end weak” trend.

3.2 Non-oriented Electrical Steel: First Rise Then Fall, Profit Pressure Highlights

In H1 2026, the non-oriented electrical steel market operated under the characteristics of high capacity, tight profits, and intensified enterprise differentiation. The market maintained 27 operating enterprises, with new private full-process enterprises entering the market, while nearly 60% of enterprises and 70% of semi-process enterprises recorded year-on-year output declines.

Affected by sustained overcapacity and falling market prices, the industry’s profit margins continued to narrow, and some semi-process enterprises faced cost inversion, forcing production reduction or shutdown. In terms of price trends, non-oriented electrical steel showed a “first rise then fall” pattern throughout the first half of the year:

Q1 Cost-driven Rise: January saw steel mills raise order prices and tight market supply, with medium and low-grade 50W800 up 109 yuan/ton month-on-month and high-grade 50W300 up 95 yuan/ton. February prices consolidated sideways due to Spring Festival holiday factors. March continued the upward trend driven by cost support, but market transaction enthusiasm weakened.
Q2 Demand-driven Decline: From April to June, downstream enterprises adopted on-demand procurement, and continuous capacity release intensified supply pressure. Market prices fell month by month. In June, 50W800 dropped 43 yuan/ton and 50W300 plunged 74 yuan/ton, marking the largest monthly decline in H1 2026.

Notably, high-end non-oriented products had weaker decline resistance than medium and low-end products, reflecting the slowing growth of new energy vehicle drive motor demand and rigid demand for traditional home appliances and industrial motors.

3.3 Core Growth Driver: New Energy Demand Decelerates While Emerging Tracks Rise

New energy vehicle drive motor electrical steel remains the core growth pole of high-grade non-oriented steel, with H1 2026 output accounting for over 30% of total high-grade product output. However, its year-on-year growth rate slowed to 21.15%, down from 24.6% in 2025, indicating that the new energy vehicle market is transitioning from rapid penetration to mature development.

Meanwhile, emerging industries represented by humanoid robots and low-altitude aircraft are rising rapidly, becoming new incremental markets for ultra-thin high-end electrical steel. Leading steel enterprises have accelerated R&D and industrial layout of ultra-thin high-performance electrical steel to seize emerging market opportunities.

4. Import & Export Market: Structural Adjustment Under Trade Friction Pressure

In H1 2026, China’s electrical steel industry maintained a stable trade surplus, but the double decline in import and export volume reflected the dual impact of external trade pressure and domestic structural upgrading. On the domestic side, medium and low-end electrical steel has achieved full self-sufficiency, and import substitution of high-end products is accelerating. On the foreign trade side, global trade protectionism continues to rise, with many countries launching anti-dumping investigations and tariff adjustments on Chinese steel products, making electrical steel a new focal point of international trade friction.

The industry also embraces structural export opportunities. The continuous upgrading of global energy efficiency standards, in-depth implementation of RCEP agreements, and explosive growth of global computing power infrastructure have driven the surge in overseas transformer and high-end electrical equipment demand. In the future, electrical steel foreign trade will shift from scale expansion to quality and efficiency improvement to cope with complex international trade situations.

5. H2 2026 Industry Trend Forecast: K-shaped Structural Differentiation

In the second half of 2026 and beyond, China’s electrical steel market will present an obvious K-shaped differentiation trend: high-end products maintain tight supply and strong price volatility, while medium and low-end products continue to face overcapacity and competitive pressure. Overall, oriented electrical steel outperforms non-oriented products, and high-grade products are far superior to medium and low-grade ones, with no comprehensive industry-wide price increase expected.

5.1 Oriented Electrical Steel: Volatile Strong Operation, High-end Upgrading as Core Theme

Demand side: Centralized bidding for ultra-high voltage projects, intensive distribution network renovation, and year-end transformer delivery peaks will form rigid seasonal demand for oriented electrical steel. Policy promotion of S13 and above energy-saving transformers will continuously squeeze low-end product market share. In addition, the rapid development of new energy vehicles, energy storage, new energy power generation, and data centers will continuously drive incremental demand for high-end HiB electrical steel.

Supply side: Total oriented steel capacity continues to expand, but high-end HiB capacity remains scarce with prominent structural supply-demand contradictions. The import substitution effect of domestic ultra-thin high-end oriented steel is further strengthened. However, fierce downstream industry competition suppresses the upward space of steel prices, and homogenized competition in the medium and low-end market will continue to compress industry profits.

Price trend: H2 2026 oriented steel prices will maintain volatile strong operation. Q3 will see moderate consolidation with limited short-term price increases, while ultra-thin HiB products will steadily rise. Q4 will usher in phased price strengthening driven by centralized grid order delivery and year-end stocking demand, with HiB growth far exceeding CGO.

Export outlook: EU safeguard investigations and India’s anti-dumping barriers continue to increase export thresholds, forcing enterprises to accelerate export structure upgrading and reduce reliance on low-end product exports.

5.2 Non-oriented Electrical Steel: Range-bound Oscillation, Intensified Structural Differentiation

In H2 2026, the non-oriented electrical steel market will maintain a range-bound oscillation pattern. High-grade products supported by new energy tracks have strong decline resistance, while medium and low-grade products continue to operate under overcapacity pressure.

Demand side: Emerging tracks such as new energy vehicles, wind power, energy storage, and humanoid robots continue to drive demand for ultra-thin high-grade non-oriented steel. The promotion of IE4/IE5 high-efficiency motor policies and domestic consumer goods trade-in policies provide marginal support for market demand.

Supply side: The structural overcapacity pattern of non-oriented steel is difficult to reverse in the short term. Multiple new high-grade production lines will be commissioned in H2 2026, intensifying high-end market competition. The oversupply pressure of medium and low-grade products remains severe, and the price gap between high and low-end products will continue to widen.

Price trend: Q3 medium and low-grade non-oriented steel prices will operate weakly with slight downward pressure. High-grade new energy products will maintain independent firm operation with weak market rebound. Q4 traditional peak season brings limited demand support, and medium and low-grade prices are difficult to reverse, showing a strong high-end and weak low-end differentiation pattern.

5.3 Emerging Market Long-term Growth Potential

During the 15th Five Year Plan period, three major emerging tracks will become the long-term growth engine of high-end electrical steel:

High-speed rail market: China will add 10,000 kilometers of high-speed rail in the next five years, with the total mileage reaching 60,000 kilometers by 2030. The upgrading of CR450 high-speed trains and traction systems will generate continuous demand for ultra-thin high-end electrical steel.
Humanoid robot market: 2026 marks the first year of large-scale commercialization of humanoid robots. The domestic shipment CAGR will exceed 85% from 2026 to 2030. By 2030, global shipments will exceed 1 million units, bringing massive demand for high-precision electrical steel.
Low-altitude economy market: As a strategic emerging industry, the low-altitude economy will achieve a core output value of over 2.5 trillion yuan by 2030 with an annual growth rate of 25%-30%. Ultra-thin high-performance electrical steel has become a key supporting material for low-altitude aircraft and flying cars.

6. Industry Long-term Development Conclusion

In the next five years, China’s electrical steel industry will bid farewell to scale expansion competition and fully enter the era of structural dividend competition. High-end, thin-specification, low-iron-loss products will be the core profit source of the industry, while medium and low-end backward capacity will continue to be eliminated.

Core enterprise competitiveness will focus on technological innovation, quality upgrading, low-carbon production, customer certification, cost control, and channel layout. With the improvement of new power systems and the expansion of emerging application scenarios, high-end HiB electrical steel demand will maintain steady growth. The gradual exit of CGO products and continuous industry capacity optimization will further promote the high-quality development of the electrical steel industry. Facing increasingly fierce homogenized competition and complex international trade situations, domestic enterprises must accelerate technological iteration and structural upgrading to seize global high-end market shares.

Etiketler: elektrik çeliği

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