# Electric motors and drives and Steel

Every electric motor's magnetic core is a stack of thin non-oriented electrical steel, and the quality of that steel sets a large part of the motor's energy losses. It is a specialised grade made by few mills, so its supply and price follow their own cycle rather than the general steel market.

Source page: https://www.materialinsights.org/links/electric-motors-and-drives-and-steel/

[Electric motors and drives](https://www.materialinsights.org/energy/e_motors/) (energy) and [Steel](https://www.materialinsights.org/commodities/steel/) (commodity): 4 relationships.

## How they are linked

### 1. Material need: electrical steel cores

*Physical flow · Strong · Non-oriented electrical steel to motor stators and rotors*

Motor cores are built from thin iron-silicon sheets that carry the rotating magnetic field with low losses, and non-oriented grades are used because a motor's field turns in every direction.

- **15 to 20%** electrical steel share of EV traction motor raw material cost (SMM estimate)
- **30 to 45%** rare earth magnet share of the same cost, the largest item (SMM)

Electrical steel is the bulk material of a motor by weight but not its most expensive input: in permanent magnet EV motors the magnets cost about twice as much as the steel. Industrial induction motors use no magnets, so steel and the copper or aluminium in windings and rotor cage make up most of their material. Non-oriented steel differs from the grain-oriented grade used in transformers, which is made on separate lines.

Sources: [POSCO Newsroom](https://newsroom.posco.com/en/electrical-steel-make-ev-motors/); [Shanghai Metals Market (SMM)](https://news.metal.com/newscontent/103482937/analysis-of-nev-motor-raw-material-cost-structure-and-supply-chain-collaboration-mechanismsmm-analysis)

### 2. Efficiency drives premium grades

*Transition · Rising · Higher motor efficiency classes need better steel*

Iron losses in the core are one of the two largest sources of waste heat in a motor, so moving to higher efficiency classes such as IE4 means thinner, higher-silicon sheet or more steel per motor.

- **26.7%** iron losses as share of total losses, WEG IE4 30 kW induction motor
- **about 64%** stator and rotor Joule (winding and cage) losses in the same motor
- **5%** cut in core loss POSCO reported for a newer non-oriented grade, 2017

WEG notes that better steel with thinner laminations reduces iron losses but raises cost, which is why efficiency rules shift demand towards premium grades. EV traction motors spin at high speed, where iron losses rise, so they push mills towards ultra-thin sheet. POSCO doubled its electrical steel capacity at Pohang in February 2017 to 160,000 tonnes a year, which it said was enough for 2.6 million EV motors.

Sources: [POSCO Newsroom](https://newsroom.posco.com/en/electrical-steel-make-ev-motors/); [WEG](https://static.weg.net/medias/downloadcenter/h33/h87/WEG-weg-explains-how-reducing-efficiency-losses-is-key-to-achieving-ie4-class-efficiency-with-induction-motors-00010002-technical-article-english.pdf)

### 3. Price link: electrical steel

*Cost and price · Weak · Both ways*

Electrical steel is a specialised grade with few suppliers, and the general steel price index does not track it closely, so motor prices barely follow steel.

- **0.00** monthly change correlation
- **0.21** 12-month change correlation
- **0.53** fitted elasticity

The weak yearly link reflects the general input cost cycle rather than a direct cost pass-through. Electrical steel premiums move with supply from a small number of mills and with trade measures, so a buyer of motors should track electrical steel prices and duties, not the broad steel index.

Sources: [Material Insights (World Bank, FRED, IMF data)](https://www.materialinsights.org/commodities/steel/correlation/)

### 4. India: duties and domestic capacity

*Policy · High in India · Trade policy shapes motor steel supply*

In December 2025 India placed five-year anti-dumping duties on cold-rolled non-oriented (CRNO) electrical steel from China, which raises costs for motor makers that bought Chinese sheet while protecting domestic mills.

- **USD 223.8 to 414.9 a tonne** anti-dumping duty on Chinese CRNO, varying by exporter, for five years from December 2025
- **₹5,845 crore** JSW and JFE investment in grain-oriented electrical steel, announced August 2025

The duty applies to non-oriented sheet used mainly in motors, generators and transformers. The JSW and JFE plans raise grain-oriented capacity at Nashik from 50,000 to 250,000 tonnes a year and at Vijayanagar to 100,000 tonnes, for 350,000 tonnes by FY2028; that grade serves transformers, so motor makers benefit only indirectly. Domestic non-oriented supply and import duties together decide how competitive Indian motor manufacturing can be.

Sources: [KNN India](https://knnindia.co.in/news/newsdetails/sectors/exportimports/india-imposes-5-year-anti-dumping-duty-on-chinese-electrical-steel-imports); [Angel One](https://www.angelone.in/news/market-updates/jsw-steel-commits-5-845-crore-to-a-joint-venture-with-jfe-steel-to-boost-capacity)

## For investors

### Key learnings

1. Electrical steel, not ordinary steel, is the input that matters for motors, and its price follows a small group of mills and trade rules.
2. Tighter efficiency classes and high-speed EV motors shift demand towards thinner, higher-silicon grades that only a few mills make.
3. In permanent magnet motors the magnets cost more than the steel, so steel price moves have a modest effect on motor costs.

### What to track

- **Non-oriented electrical steel price premium over hot-rolled coil**: A widening premium signals tight specialist capacity and higher motor costs (Monthly · steel price reporting agencies)
- **Electrical steel capacity additions**: New lines ease supply and narrow premiums (As announced · company filings)
- **Motor efficiency rules (IE3, IE4 mandates)**: Stricter classes raise demand for premium grades (As notified · national energy efficiency agencies)

## For policymakers

### Key learnings

1. Raising minimum motor efficiency saves electricity but increases demand for premium electrical steel, so efficiency and steel capacity policy should be planned together.
2. Anti-dumping duties on Chinese non-oriented steel protect Indian mills but raise input costs for Indian motor and EV makers until domestic supply grows.
3. Grain-oriented and non-oriented electrical steel are made on separate lines, so new transformer steel capacity does not ease motor steel supply.

### What to track

- **Imports of CRNO electrical steel by source**: Shows whether duties are shifting supply to domestic mills or other exporters (Monthly · Directorate General of Commercial Intelligence and Statistics)
- **Domestic CRNO capacity and output**: Rising output reduces import dependence for motors and EVs (Annual · Ministry of Steel)

## India

India imposed five-year anti-dumping duties of USD 223.8 to 414.9 a tonne on non-oriented electrical steel from China in December 2025, while JSW and JFE are expanding grain-oriented (transformer) capacity, so domestic supply of motor steel remains a live industrial policy question.

## Sources

1. [Electrical steel: what makes EV motors run](https://newsroom.posco.com/en/electrical-steel-make-ev-motors/), POSCO Newsroom (2017)
2. [WEG explains how reducing efficiency losses is key to achieving IE4 class efficiency with induction motors](https://static.weg.net/medias/downloadcenter/h33/h87/WEG-weg-explains-how-reducing-efficiency-losses-is-key-to-achieving-ie4-class-efficiency-with-induction-motors-00010002-technical-article-english.pdf), WEG
3. [Analysis of NEV motor raw material cost structure and supply chain collaboration mechanism](https://news.metal.com/newscontent/103482937/analysis-of-nev-motor-raw-material-cost-structure-and-supply-chain-collaboration-mechanismsmm-analysis), Shanghai Metals Market (SMM) (2025)
4. [Price correlation, Material Insights](https://www.materialinsights.org/commodities/steel/correlation/), Material Insights (World Bank, FRED, IMF data) (2026)
5. [India imposes 5-year anti-dumping duty on Chinese electrical steel imports](https://knnindia.co.in/news/newsdetails/sectors/exportimports/india-imposes-5-year-anti-dumping-duty-on-chinese-electrical-steel-imports), KNN India (2025)
6. [JSW Steel commits ₹5,845 crore to a joint venture with JFE Steel to boost capacity](https://www.angelone.in/news/market-updates/jsw-steel-commits-5-845-crore-to-a-joint-venture-with-jfe-steel-to-boost-capacity), Angel One (2025)