Interesting mix of science, technology and politics proving to be a choke point for electrical expansion, including an impact on data centers

“…grain-oriented electrical steel (GOES).

Every transformer on the grid runs on a core made of GOES, from the large power transformers (LPTs) that carry over 90% of the nation’s electricity to the 60 to 80 million distribution transformers feeding energy to homes and businesses. GOES prices doubled from 2020 to 2024, and U.S. imports of GOES transformer cores quadrupled from 2018 to 2025.

…

Across multiple metrics, GOES made by [US-based] Butler Works is inferior to GOES made in nations like Japan and Korea. Because GOES imports and domestic GOES are non-substitutable, an expansion of existing production capacity would increase U.S. supply for a good that much of the U.S. market doesn’t want.“

https://thebreakthrough.org/issues/energy/america-makes-the-wrong-steel-for-its-transformer-supply-chain

Isn't that just cold tolled, very low carbon steel, specifically heat treated to to facilitate grain alignment and reduced hysteresis losses ?
Why would the US be incapable of producing it to as high a quality as needed ?
It's not like it requires 'critical' minerals.

It provides some details in the article:

Japanese GOES loses substantially less energy than American GOES because Japanese steelmakers JFE and Nippon use more advanced processing technologies than Cleveland-Cliffs, the sole U.S. manufacturer of GOES

The process lets these East Asian mills etch grooves into the GOES sheets that reduce energy losses; then, after sheets are wound into a core, they treat the core with heat to relieve mechanical stress from core winding and reduce energy losses even further. In contrast, the older etching process used at Butler Works makes grooves that deform if exposed to the temperatures needed for the heat treatment step, also known as annealing. As a result, Butler Works doesn’t anneal its GOES and misses out on the resulting improvements to energy efficiency.

I don't know how expensive it would be to change the process, but clearly Butler Works didn't consider it essential for its business. Plus them being the sole provider likely also has to do with it (based on free market principles and all that).

4 hours ago, MigL said:

Isn't that just cold tolled, very low carbon steel, specifically heat treated to to facilitate grain alignment and reduced hysteresis losses ?
Why would the US be incapable of producing it to as high a quality as needed ?
It's not like it requires 'critical' minerals.

Given their history of focused tempering in steel, I imagine they they would have a strong sense of the internal structure compared to US metal workers.

Edited November 2Nov 2 by StringJunky

4 hours ago, CharonY said:

It provides some details in the article:

I don't know how expensive it would be to change the process, but clearly Butler Works didn't consider it essential for its business. Plus them being the sole provider likely also has to do with it (based on free market principles and all that).

I got the impression that they’re using old equipment and that limits them to a particular process, and it’s a matter of deciding to invest/coming up with the money to upgrade. Seems like with so much demand it’d be worth it.

The situation might stem from a decision that made sense at the time (or perhaps it was a shortsighted one based on penny-pinching)

14 hours ago, swansont said:

I got the impression that they’re using old equipment and that limits them to a particular process, and it’s a matter of deciding to invest/coming up with the money to upgrade. Seems like with so much demand it’d be worth it.

The situation might stem from a decision that made sense at the time (or perhaps it was a shortsighted one based on penny-pinching)

I only now realized that for some reason I missed the passage where they estimated the cost to be about 1-2 billion and it seems that those will likely come from federal subsidies/grants. What is still not quite clear to me from the article if that would actually meet demand as a lot of them are still imported, despite tariffs.

If they spend 1-2 billion to upgrade processes/equipment they will naturally pass on the costs to customers.
If that cost increase happens to be larger than the tariff imposed on the imported steel, customers will choose to buy the imported.

Incidentally, Cleveland-Cliffs, while announcing increased profitability, recently laid off several hundred workers at Stelco, its Hamilton, Canada, subsidiary. There may be a lawsuit brewing.

1 hour ago, MigL said:

Incidentally, Cleveland-Cliffs, while announcing increased profitability, recently laid off several hundred workers at Stelco, its Hamilton, Canada, subsidiary. There may be a lawsuit brewing.

And wasn't the sale only approved under certain provisions, such as maintaining employee levels and then the CEO was stating in a live interview that buying Stelco was actually a defensive acquisition, i.e. to protect US steel production?