The concept of electrical steel is a special type of steel with magnetic properties. It has small hysteresis area resulting in low power loss per cycle, low core loss and high permeability. The grain oriented electrical steel is an important material in the production of energy efficient transformers and large, high performance generators. With the laminated grain oriented electrical steel, wound or punched sheets, it is the essential core material of distribution transformers, power transformers and small transformers. On the other hand, non-grain oriented electrical steel products are generally used as core parts for electrical motors and generators. The basic features of non-grain oriented electrical steel are having permeability, low core loss and low cost prices.

Basicly, the major differance between grain and non-grain electrical steel is the magnetisation direction. The grain concept has an optimal magnetic behaviour for only only direction, however -grain electrical steel has isotropic magnetic behaviour. As a result of these behaviours, grain electrical steel is suitable for transformers, non-grain electrical steel is suitable for engines and generators. The typical field lines in these machines explain why rotating machines need multidirectional magnetisation, whereas for transformers, unidirectional magnetisation within the limbs requires only one preferred direction of magnetisation.