Grain-oriented electrical steel (GOES) supply chain
BOTTLENECKCleveland-Cliffs dominates US supply of this specialized steel which has no substitute and gates global transformer output.
Specialized magnetic steel for transformer cores, with strict grain orientation requirements. No standard steel substitute exists; this single material gates global transformer output. Cleveland-Cliffs controls 60-70% of US supply, shielded by 25% tariffs; prices rose over 20% in 2024-2025.
Specialised silicon steel used for transformer cores, requiring precise magnetic properties not achievable from standard electrical steel; the binding material input for transformer manufacturing.
Why the concentration exists
High-grade GOES requires magnetic domain refinement technologies that few producers have mastered. One US producer's manufacturing equipment has been described as antiquated. That producer lacks the capability to produce Permanent Domain-Refined GOES, which represents the highest performance grade. These technical barriers keep electrical steel a small, niche segment of the broader steel industry. Every motor and every transformer contains electrical steel, yet few companies can produce it.[6][4][3]
What the evidence shows
Cleveland-Cliffs is the only major domestic GOES supplier in the US.
factmr.comThe GOES oligopoly drives a 48-60 month lead time for large power transformers.
energy-solutions.coAsia-Pacific holds 60%–65% of the global GOES market share.
industryresearch.bizWho supplies it
Japan accounts for 11% of global GOES capacity and South Korea for 7%. POSCO operates a facility at Pohang with capacity to produce 160,000 tons annually. Key global players include ArcelorMittal, Nippon Steel Corporation, JFE Steel Corporation, and thyssenkrupp Steel. Cleveland-Cliffs is the sole domestic US producer, while the majority of high-grade GOES imported into the United States comes from South Korea.[19][8][15][1][10]
Who controls it
What it depends on, and what depends on it
Grain-oriented electrical steel is primarily used in the production of transformers, inductors, and other applications requiring improved permeability at high flux densities. The material is essential for energy-saving transformers and large-scale high-performance generators. The transformer segment dominated the grain-oriented electrical steel market in 2024. Everything with a motor and every transformer contains electrical steel.[17][18][15][3]
Where it sits in the stack
Takes in: Raw silicon steel, specialised rolling and annealing processes
Sends on: GOES coils delivered to transformer manufacturers
What would break it
US market data indicates GOES price increases of 60% to 70% since 2020. Prices have roughly doubled since 2020 according to other sources. Since the COVID-19 pandemic, market volatility has been a key issue with prices reaching all-time highs. These price dynamics reflect the tight supply situation from limited domestic production capacity.[11][16][12]
Japanese and South Korean GOES producers continue selling into the US despite a 25% tariff dating to the Trump administration. To avoid the tariff, Asian producers sell GOES into Mexico and Canada where it is shaped into transformer cores for US customers. This tariff avoidance was identified in a US Commerce Department investigation. The tariff structure has not achieved its apparent goal of strengthening domestic GOES supply.[5]
Amorphous steel outside the US costs approximately $0.95 per pound compared to HiB grain-oriented steel at $0.86 per pound. Trade groups have expressed concern that proposals to replace GOES with amorphous material could eliminate domestic GOES production entirely. In Europe, electrical steel shortages stem from competition from electric vehicle motors and the loss of Ukrainian and Russian manufacturing. Imports into the EU have tripled since 2022 and rose a further 50% in 2025.[7][2][9][14]
What to watch
JFE Steel and JSW Steel established a joint venture in India in February 2024 for end-to-end production of grain-oriented steel sheet. Full-scale production is targeted for the fiscal year ending March 2028. The joint venture invested approximately 120 billion yen in the expansion. JFE Steel's total grain-oriented steel capacity in India will reach 350,000 metric tonnes per year upon completion.[13][20]
Cleveland-Cliffs Steel was awarded a $400 million indefinite-delivery/indefinite-quantity contract by the Defense Logistics Agency in September 2025. The contract extends for five years to September 2030. This agreement provides ongoing support for domestic GOES production through the end of the decade.[14]
Related nodes
On the plate
Sources
- nationalinterest.org · 2025-10-15T10:13:49
- powermag.com · 2023-05-31T21:00:51
- crugroup.com · 2024-09-13T00:00:00
- federalregister.gov
- utilitydive.com
- posco.com · 2003
- en.wikipedia.org · 2019
- theinvestor.co.kr · Feb. 20, 2017
- carbonrisk.world
- aveva.com
- berlin.cwiemeevents.com
- woodmac.com
- steel-technology.com · February 2024
- magneticsmag.com · 2025
- polarismarketresearch.com · 2024
- zerohedge.com
- mapessprowl.com
- silicon-steels.com
- promisteel.com · first half of 2024
- news.metal.com · Aug 21, 2025
Full scorecard, owner shares, supply edges and the full tracked roster are in the desk letter.
GET THE BRIEFING