Perhaps the two most important factors in designing electromagnetic devices are the core loss and the permeability. Core loss, expressed in watts per unit weight (W/lb.), is the amount of energy dissipated as heat in the core material when subjected to alternating magnetizing force at a given induction and frequency. Therefore care must be exercised in material selection, which will prevent overheating of the equipment Excessive heat rise in the core could result in damage to the winding insulation, which may result in the destruction of equipment

Since core loss is normally the most important consideration for core design, electrical steel are primary produced and graded by their maximum permissible core losses. In 1947 AISI (American Iron and Steel Institute) assigned a type number to each grade according to its maximum core loss. The AISI type number consists of the letter M followed by a two-digit number. The letter M stands for magnetic material and the two digit numbers represents ten times the Max allowable core loss of that grade for a given thickness (29 ga .014in) tested at 15KG, 60 Hz. The type number uniquely identifies each grade of steel regardless of the producer and facilitates the selection and use of electrical steel by the end users.

ASTM (American Society for Testing and Materials) has adopted a more versatile system of grade identification. ASTM type designation consists of six-character label (e.g. 47FI74). The first two digits indicate the nominal decimal thickness of the material in millimeters. A code letter indicates the class of material and standard testing practice. The last three digits represent 100 times the maximum permissible core loss of that grade, tested at 15KG, 6OHz. To illustrate the ASTM grading system, 47F174 indicates .47mm thick (.0185 inch) fully processed steel with 1.74 W/lb. max. Core loss.

Although AISI has adopted the latest ASTM designation and AISI type numbers do not have the specific association with material core loss due to significant improvements of materials, but AISI type numbers with prefix 'M' are still widely accepted.

To avoid confusion in selection and usage of electrical steel and facilitate cross references between different identification systems, NLC adheres to both AISI and ASTM systems.