Every pound of domestic grain-oriented electrical steel in a US transformer core is melted in one electric arc furnace in Butler, Pennsylvania, at a plant with 0.3 million net tons of configured raw steel capacity and a maximum finished coil width of 920 mm. The US consumes about 220,000 metric tons of GOES a year. The transformer PPI is up 91% since December 2019. Those three numbers are most of the story behind pad-mounts quoted at 40 to 65 weeks and GSUs at 100 to 150 weeks in June 2026, and this piece walks through the mill, the loss gap in watts per pound, the import channels, the DOE rule that was written around Butler, the $400 million Pentagon stockpile, and what the Defense Production Act can and cannot do about any of it.
Source: BLS PPI WPU117409 via Open Factory Lead-Time Monitor (compiled from BLS PPI, Census M3, Schneider Lead Times Guide, ISM; as of July 2026)
The index sat at 200.3 in December 2019, 351.2 in August 2025 and 381.8 in July 2026, so the last eleven months added 30 points, more than the entire decade before 2021. The Open Factory Lead-Time Monitor carries this series next to the published lead times it explains: Wood Mackenzie’s survey put power transformers at 128 weeks and GSUs at 144 weeks in Q2 2025 (as reported by POWER Magazine), and our 160-week transformer piece covers who gets delivered first. This one covers the steel.
One Mill, 1,300 Workers, 920 Millimeters
Butler Works sits an hour north of Pittsburgh on 1,300 acres, melts in an EAF feeding an argon-oxygen decarburization unit, casts on two double-strand casters, and runs a three-stand tandem cold mill inside 3.5 million square feet of buildings. It makes stainless, carbon and electrical steel; the GOES is finished partly at Zanesville Works in Ohio. Commerce’s Section 232 investigation counted about 1,300 employees at Butler and about 100 at Zanesville in 2021; Cliffs told DOE in July 2026 the two plants employ approximately 1,500, all UAW.
The United States has had exactly one GOES producer since Allegheny Ludlum quit in 2016, and that producer’s coil is 12 mm too narrow for large power transformer cores. Commerce’s 2021 report says it plainly: AK Steel “does not produce steel wide enough (>932mm) to form the laminations and cores of larger transformers,” and “the maximum width of its domain-refined products (TRAN-COR) is 920mm.” Two strips can be patched, but “this process leads to increased production costs and loss of efficiencies in the core.” The same report records that AK did not offer the intermediate MOH grade sold by Korean, Japanese and Chinese mills, and that manufacturers “are unable to obtain permanent, heat resistant domain-refined grain oriented steel (PDR GOES) from the sole domestic manufacturer.” The width matters because Wood Mackenzie counts imports covering 80% of US power-transformer supply, and NIAC puts domestic LPT share at about 20%: the units the US cannot build are the ones Butler cannot supply steel for.
How much GOES flows through the market is the number nobody publishes. Commerce’s transformer report estimated US consumption at approximately 220,000 metric tons a year, and Cliffs told DOE that 200,000 tons go into distribution transformers. Butler’s own GOES tonnage is redacted in every public filing; WEG’s comment to Commerce put AK Steel at “a 70% market share of the current industry.” Cliffs reports stainless and electrical steel together: 552,000 net tons shipped in 2025, down 3% from 567,000 in 2024, for $1,748 million of revenue, and the 10-K says the electrical steel business “is expected to continue to achieve strong profitability in the coming years.” GOES is about 25% of a transformer’s cost on Commerce’s survey basis, which is why the Bid-Tab Price Book tracks awards per kVA rather than trusting a list price.
The Loss Gap, in Watts per Pound
Every DOE transformer analysis rides on one table of core-steel properties, and it is the fairest scorecard available because the measurements come from the same test frame. The designations are DOE’s: M-grades are conventional GOES by thickness, “hib” is high-permeability, “dr” is laser domain-refined, “pdr” is heat-proof (permanently) domain-refined, and “am” is amorphous.
Source: US DOE, Distribution Transformers Final Rule Technical Support Document, April 2024, Table 5.3
M3 loses 0.60 W/lb at 1.7 T, 23hib090 0.52, laser-refined 23dr080 0.47, heat-proof 23pdr085 0.46, and amorphous 0.108 W/lb at its 1.35 T ceiling, per the DOE technical support document. On a single sheet, then, Cliffs’ laser-scribed TRAN-COR H and the Japanese heat-proof grades are near-equal. The gap opens inside a wound core. Distribution cores are wound, then stress-relief annealed at high temperature; DOE’s TSD explains that laser domain refinement does not “survive the high-temperature annealing process used to relieve stresses in wound core distribution transformer designs,” so laser-refined steel “is primarily used in stacked core designs,” while the heat-proof grooves “do survive high-temperature annealing.” Cliffs does not sell a heat-proof grade. Nippon Steel and JFE do, and Breakthrough Journal’s August 2026 analysis concluded that in distribution cores Cliffs’ steel loses up to 39% more energy than GOES from Nippon Steel and JFE, using a groove-etching process JFE developed in the 1970s that only Nippon Steel, JFE and POSCO run.
The datasheets say the same thing in W/kg. JFE guarantees 23JGSD075 at 0.75 W/kg at 1.7 T and 50 Hz, 0.99 W/kg at 60 Hz, tested after anneal, in coils from 50 to 1,050 mm wide. Nippon Steel guarantees 23ZDKH70 at 0.70 W/kg on a single-sheet tester without anneal, and its heat-proof ZDMH80 at 0.80 W/kg after anneal. Metglas guarantees its amorphous 2605SA1 and 2605HB1M at 0.20 W/kg at 1.4 T and 60 Hz, in 25 micron ribbon no wider than 213 mm, which is why amorphous cores are bought finished and why nobody builds a 300 MVA amorphous unit. Cliffs told DOE in July 2026: “We are not aware of any companies globally that mass produces an electrical steel product that has lower core loss” than TRAN-COR H. Its current product bulletin was unreachable when we checked (the CDN returns 403), so the only published Cliffs width and loss figures we can cite are the ones Commerce cited in 2021, and Cliffs is welcome to send newer ones.
Source: US DOE, Distribution Transformers Final Rule Technical Support Document, April 2024, Table 5.4.2
DOE’s five-year average prices were $1.70/lb for M3, $1.96 for laser-refined 23dr080, $2.12 for heat-proof 23pdr085 and $2.02 for finished amorphous cores, with 23pdr085 modeled to fall to $1.80 if capacity expanded. The same document says the single domestic supplier’s low-loss capacity “has historically been directed towards the power transformer market,” and that “lower loss grades of GOES have traditionally been sold at a significant price premium relative to M3 grades.” Central Moloney told DOE it buys pdr cores for 90% of its designs when it can get them. That premium is the first place to look when the Quote Check flags a pad-mount quote above the Bid-Tab band: not copper, steel.
Amorphous Is 213 Millimeters Wide
The steel that DOE’s 2023 proposal would have forced into 95% of distribution cores is made by one company in one town. Metglas in Conway, South Carolina is the only US producer of amorphous cores; Cliffs’ 2023 comment put its output at 20,000 to 25,000 tons a year with 15,000 tons of headroom against the 200,000 tons of GOES in distribution cores, and amorphous at about 3% of the distribution market. The ribbon is 25 microns thick and comes in 142, 170 or 213 mm widths, it saturates at 1.56 T against 1.87 to 1.90 T for high-permeability GOES, and DOE’s TSD notes that amorphous cores “are generally purchased as finished cores and not directly manufactured by distribution transformer manufacturers.” Cliffs’ comment claimed an amorphous unit carries an estimated 25% more weight for the same rating, and that the substrate for “domestic” amorphous is imported predominantly from China and Japan.
Amorphous cuts core loss by two thirds at the sheet and cannot be scaled past distribution class, so it removes GOES demand at the small end and leaves the LPT problem untouched. Metglas itself claims 35% of the core loss of M3 for finished cores. That is real money on a pole-top unit that idles at 20% load for 30 years and irrelevant to a 300 MVA GSU that cannot be wound from 213 mm ribbon. NIAC’s June 2024 report asked the government to “allow enough time for amorphous steel production capacity to expand in the U.S. or other near-shore areas,” which is a polite way of saying the capacity did not exist when the rule was written and, on Cliffs’ numbers, still covers about a fifth of the tonnage the 2029 standard would move. Every one of those tons comes off Butler’s order book, which is the arithmetic behind the reversal in the next section.
Japan Sells the Coil, Mexico Sells the Core
Because Butler cannot make the width or the heat-proof grade, the US imports the difference, and it does so through two doors. The first is GOES coil under HTS 7225.11 and 7226.11.
Source: UN Comtrade, US imports HS 7225.11 and 7226.11 (2015 to 2025); Open Factory compilation
Coil imports peaked at $149 million and 67,800 tonnes in 2017, fell to $54 million in 2019 after the 25% Section 232 duty (Proclamation 9705, 83 FR 11625), recovered to $128 million in 2023, and dropped to $66 million and 19,900 tonnes in 2025, with Japan at $39.6 million (60%) and Korea at $14.0 million (21%). Russia shipped $9.6 million in 2015 and zero since 2023; the UK and Czech volumes of 2015 to 2018 are gone with the closure of Orb and the shrinking of thyssenkrupp’s plants. The 2025 collapse tracks the 50% duty imposed on June 4, 2025 by Proclamation 10947. That coil is not cheap to begin with.
Source: UN Comtrade, US imports HS 7225.11 and 7226.11 (2015 to 2025); Open Factory compilation
Dividing customs value by net weight gives $2,500/t in 2015, $3,448/t in 2022 and $3,327/t in 2025, before duty; at 50% the landed cost of Japanese coil is ~$5,000/t, or ~$2.27/lb against DOE’s $1.70/lb for domestic M3. No contract price for Butler GOES is public, and the Equipment Price Benchmark will not publish one until it holds eight or more contributed quotes from five or more contributors. Until then the customs unit value above is the only GOES price series a buyer can check a quote against, and it says the steel itself has risen a third in a decade while the finished transformer has nearly doubled.
The second door is bigger. Since 2018 the duty has applied to coil but, until August 2025, not to the laminations and cores cut from it, so core shops moved to Canada and Mexico and imported Japanese steel there. Commerce’s survey found 88% import penetration for laminations in 2019, 75% for wound cores and 54% for stacked cores; core imports rose from $22 million in 2015 to $167 million in 2019, Canada 52% and Mexico 45%, and “neither Mexico nor Canada has indigenous production capability for GOES.” Breakthrough’s series has transformer-core imports at $126 million in 2018 and $524 million in 2025. The broader parts heading shows the same shape.
Source: UN Comtrade, US imports HS 8504.90 (2018 to 2025); Open Factory compilation
HS 8504.90 imports went from $1,287 million in 2018 to $3,649 million in 2025, with Mexico at $986 million, Thailand $542 million, Canada $390 million, China $351 million and India $246 million. The heading also covers inverter and converter parts, so read it as an upper bound on cores; the direction is not in doubt. Commerce concluded in 2021 that laminations and cores “are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security,” and it took four more years for the August 19, 2025 inclusions notice (90 FR 40326) to add 8504.90.9634, 9638 and 9642 (laminations, wound cores, stacked cores) and 8504.23.00 and 8504.33.00 to the derivative list, effective August 18, 2025. Our Tariff Exposure Calculator prices each of those lines by origin, and the tariff bill of materials shows what the change adds to a finished lineup.
Cliffs has been asking the government to close this door since 2013 and lost every time until 2025. AK Steel, Allegheny Ludlum and the Steelworkers petitioned in September 2013 against GOES from seven countries; the ITC found no material injury from Germany, Japan and Poland in September 2014 and none from China, Czech Republic, Korea and Russia that November, one commissioner dissenting each time. Lourenco Goncalves told the Congressional Steel Caucus in March 2020 that Butler and Zanesville would close without action on cores and laminations. Europe, meanwhile, has anti-dumping minimum import prices on GOES from China, Japan, Korea, Russia and the United States, and on March 27, 2026 opened a safeguard investigation that also covers laminations and cores: Butler’s steel is a dumping target in Brussels and a national-security asset in Washington in the same year.
What the DOE Rule Did and Undid
The one policy that moved GOES demand rather than GOES tariffs was the distribution transformer efficiency standard, and it moved it twice.
Source: Federal Register, BIS, NIAC, Cleveland-Cliffs, Department of War, regulations.gov; Open Factory compilation
Thirteen dated actions, two of them about demand: the April 2024 final rule that kept roughly 75% of core steel on GOES, and the April 2026 DPA determination that named electrical core steel a defense resource. DOE’s January 11, 2023 proposal (88 FR 1722) set levels that, in Secretary Granholm’s words, would have required “about 95% of the electrical steel in distribution transformers to be amorphous,” with compliance in 2027 (as reported by Utility Dive). Cliffs’ March 2023 comment said the proposal would “eliminate the market” for Butler’s product and put nearly 1,500 jobs at risk, that amorphous was about 3% of the distribution market, and that the sole US amorphous producer ran at 20,000 to 25,000 tons a year with 15,000 tons of headroom against 200,000 tons of GOES to replace. Manufacturers put conversion at $30 to $50 million per plant and $500 to $800 million for the industry.
DOE folded. The April 22, 2024 final rule (89 FR 29834) adopted standards “expected to require significantly less amorphous material,” extended compliance two years to April 23, 2029, and estimated $14 billion of energy savings and 85 million tonnes of CO2 over 30 years, down from $15 billion and 340 million tonnes in the proposal. Cliffs applauded it on April 4, 2024: “we expect to actually see an increase in demand for our GOES, opening the possibility of future investments and expansion of our plants.” On July 22, 2024 it announced a $150 million distribution transformer plant at Weirton, $50 million of it a West Virginia forgivable loan, 600 USW jobs, online in the first half of 2026, citing the efficiency standards as “ensuring the viability of this investment.” NIAC’s June 2024 report credited the rule with a “carefully synchronized path” and asked for a virtual transformer reserve with the government as buyer of last resort.
Ten months later the transformer plant was dead and two years later Cliffs asked DOE to repeal the rule it had applauded. Cliffs scrapped Weirton on May 7, 2025, the same week it posted a $483 million first-quarter loss and idled five other facilities. On June 15, 2026 DOE issued a request for information (docket EERE-2026-BT-STD-0133) on how the 2029 standards “interact with national security considerations.” Of the 33 comments filed, the utilities and the transformer makers defended the rule: EEI asked only for longer compliance, APPA “does not advocate for any changes,” NRECA said it “strikes the right balance,” NEMA urged DOE “to refrain from actions that would disrupt the certainty,” and ERMCO called it “reasonable, balanced, and achievable” (as reported by Utility Dive). Cliffs’ July 15, 2026 comment asked DOE to “continue to apply the current 2016 efficiency standards indefinitely” or cap the standard at EL2, and called the 2024 rule “a disincentive for further investment in domestic GOES capacity.” Every buyer with a 2029 delivery in the Lead-Time Schedule now carries a spec risk on the core, and the large-load policy tracker carries the docket.
The $400 Million Stockpile
In September 2025 the Defense Logistics Agency awarded Cleveland-Cliffs Steel Corp. a maximum $400 million indefinite-delivery, indefinite-quantity contract for grain-oriented electrical steel, a sole-source, five-year award with no option periods, performance complete September 8, 2030, funded with fiscal 2025 through 2029 transaction funds for the Army, Navy, Air Force, Marine Corps and Space Force. Goncalves disclosed it on the October 20, 2025 earnings call and put the volume at up to 53,000 short tons, adding that “the government tends to stockpile the material for national security purposes” (as reported by Steel Market Update). The Department of War published the award on July 1, 2026, nine months after the fact.
Three arithmetic facts follow. First, 53,000 short tons over five years is ~10,600 short tons a year, about 4 to 5% of the ~220,000 tonnes the country consumes; it is a stockpile draw on Butler, not a capacity addition. Second, $400 million over 53,000 tons is a ceiling of ~$7,500 a short ton, more than double the ~$3,300 a tonne at which Japanese coil clears customs before duty; the contract is a maximum, not a price, but it is the first federal number attached to Butler steel. Third, the stockpile buys the 920 mm laser-scribed product Butler makes today. It does not buy a wider mill, a heat-proof line, or an amorphous caster. Cliffs’ own July 2026 comment describes the only expansion under way: new furnaces at Butler “supported by a DOE award of $75 million,” with the total investment and the capacity gain redacted; the project replaces two gas-fired slab reheat furnaces with four induction furnaces and, per Goncalves, proceeds “on schedule” after surviving the October 2025 grant cancellations (SMU). The three disclosures the OEM Disclosure Scorecard asks a supplier for, capacity in units, published lead time and delivery performance, are all absent from Cliffs’ filings; GOES capacity appears only as a redacted bracket.
The disclosure lag is itself a data point for buyers. A federal customer took roughly 5% of the only domestic GOES supply off the merchant market in September 2025, the seller mentioned it on an earnings call a month later, and the buyer confirmed it the following July. Nothing in between reached a transformer OEM’s purchasing desk except a tighter allocation and a longer quote, which is exactly the lag the Lead-Time Monitor exists to close: it takes the Schneider lead-time guide, Census M3 unfilled orders and 10-Q backlog disclosures and publishes them monthly, so that a September allocation shows up as an October number rather than a July press release. Goncalves told investors on the same October 2025 call that the US steel market “is now hostile territory for dumped steel from abroad” (Q3 2025 release); for a GOES buyer that hostility is a 50% duty on the only coil wide enough for the job.
The Determination, and the Three Doors
On April 20, 2026 the President signed a Section 303 determination finding that “transformers, transmission lines and conductors, substations, high-voltage circuit breakers, power control electronics, protective relay systems, capacitor banks, electrical core steel, and related raw materials and manufacturing tools” are essential to national defense, that industry “cannot reasonably be expected to provide these capabilities” without action, waiving the requirements of section 303(a)(1) to (a)(6), and directing the Secretary of Energy to make “purchases, commitments, and financial instruments.” It was published in the Federal Register on April 23, 2026, and DOE’s June RFI cites it as the reason to reopen the transformer rule. The determination arrived 22 months after NIAC’s seven recommendations, which asked for CHIPS-style incentives tied to verifiable capacity, a DOE task force to size the subsidy, long-term purchase commitments of the kind European utilities sign for five to ten years, the virtual reserve, design standardization, coordinated steel, standards and trade policy, and a workforce pipeline; it explicitly named “Defense Production Act funding to support the increased development of large transformer domestic capacity.” The DPA Title III fund had about $323 million remaining for fiscal 2026 (as reported by Utility Dive), against Breakthrough’s estimate of $1 to 2 billion for a Butler retrofit or a greenfield GOES mill.
That is the free version of the bottleneck: one EAF, 920 mm, no heat-proof grade, a rule that first threatened and then protected it and is now being reopened at its request, a stockpile that pulls from it, and a determination with less cash than one mill costs. What a buyer does with this on Monday is narrower and more useful. If the transformer is under 5 MVA, ask the OEM in the RFQ which steel designator is in the core and whether the core was annealed; a pdr or amorphous core is a different loss curve and a different import exposure, and the Transformer Sizing and Cost tool prices the unit either way. If the unit is above 50 MVA, assume the core steel is Japanese or Korean regardless of the nameplate, and price the tariff on the route it took with the Tariff Exposure Calculator. Either way, place the PO for anything with a 2029 delivery before the docket closes, because a re-spec after DOE acts is a lost slot, and the slot economy piece shows what a lost slot resells for.
Behind the paywall: what the DPA determination can and cannot fix, and the three import routes, with the mills behind them, the duty on each door as of July 2026, JFE’s 1,050 mm heat-proof coil against Butler’s 920, and the one route whose tariff is capped at 15% through 2027, all tied to the Lead-Time Monitor classes they feed.