In the process of magnetization of a ferromagnetic substance through a cycle, there is expenditure of energy. The energy spent in magnetizing a specimen is not recoverable and there occurs a loss of energy or hysteresis loss in the form of heat. This is so because, during a cycle of magnetization, the molecular magnets in the specimen are oriented and reoriented a number of times. This molecular motion results in the production of heat. It has been found that loss of heat energy per unit volume of the specimen in each cycle of magnetization is equal to the area of the hysteresis loop.
The shape and size of the hysteresis loop is characteristic of each material because of the differences in their retentivity, coercivity, permeability, susceptibility and energy losses etc. By studying hysteresis loops of various materials, one can select suitable materials for different purposes.