The US grain-oriented electrical steel (GOES) market is undersupplied with only one domestic producer having an estimated capacity of 220 thousand metric tonnes compared to estimated 2024 consumption (or demand) of 239 thousand metric tonnes.  When considering the higher quality “HiB” grade, the shortage is even more acute.  Thus, the US transformer market imports “intermediary products” such as cores and laminations to facilitate production.  (Note:  A metric ton is 2,204.62 pounds compared to a net, or short, ton of 2,000 pounds and a gross tonne of 2,240 pounds.)

US based transformer manufacturers are reporting 12 to 36 month lead times for small to medium distribution transformers.  Higher capacity power transformer lead times in the US are even longer, including small power transformers required for the rapidly expanding electrical grid in support of the data center and AI industries. 

Studies by the Department of Commerce have previously identified that the US has less than 50% domestic production capacity to support consumption of power transformers.  In the last twelve months, companies such as Hyosung, GE Vernova and Siemens have announced plans to increase production of power transformers in the US but the capacity increase will still not meet anticipated demand. 

Complicating the supply situation are very high and very expensive barriers for entry into GOES production.  Once approved, from engineering to execution a new GOES production facility could take three to five years to achieve regular production.