OscarNet: Biden's Energy Policy Mandates Cause Severe Shortage of Electrical Steel and Transformers

Once again we have additional strong evidence of more Biden-sponsored inflation

Electrical Steel Q&A

Q: What is Electrical Steel
A: Electrical steel is specialty steel used in the cores of electromagnetic devices such as motors, generators, and transformers because it reduces power loss. [Via Wikipedia]

For more on electrical steel, please consider Electrical Steel: The heart of an Electric Motor.

Electrical steel is a soft magnetic material. In such materials an external magnetic field generates a magnetic flux density that is many times higher than would be the case in air. In simple terms, the magnetic field is strengthened by the soft magnetic materials. Flux density is key to the torque of an electric motor.
For conventional electric motors, such as those used in elevators or machine tools, the frequency is 50 hertz. By contrast, high-speed motors for electric and hybrid cars have frequencies of more than 400 hertz. So the goals for electrical steel developers are clear: Electric cars need soft magnetic materials with high flux density and minimal core losses at high frequencies.

Paper-Thin Steel Needed to Power Electric Cars Is in Short Supply

The Wall Street Journal reports The Paper-Thin Steel Needed to Power Electric Cars Is in Short Supply

Large U.S. steelmakers are ramping up production of a hard-to-make, paper-thin steel to capture a fast-growing market for a material critical to powering electric vehicles.
Such electrical steel, which accounts for about 1% of all the steel produced annually in the world, already is in short supply for electric vehicles, executives said. Companies expect demand to accelerate faster than production as EV volumes expand in the coming years.
“It’s in limited supply and with very long lead times. Sometimes 50 or 52 weeks,” said Hale Foote, owner of Scandic Springs Inc., a San Leandro, Calif., company that uses high-grade electrical steel to make parts for scientific measurement devices.

US Steel Announcement

US Steel made that announcement on March 23, but it will not be enough.

Electric Steel Dilemma & Its Impact on Motor Vendors

In a July 2022 article, Automation reported Electric Steel Dilemma & Its Impact on Motor Vendors

Electric steel is used heavily in the manufacturing of electric motors. The material is key to producing the electromagnetic field used to turn the rotor. Without the electromagnetic properties associated with this iron alloy, the performance of electric motors would be substantially compromised.
As electric vehicle production continues to grow, so does the associated demand for the electric steel used in the motors to power them. Resultingly, the bargaining power between commercial/industrial electric motor vendors and their steel suppliers is becoming increasingly undermined. As this trend progresses, it will impact vendors’ ability to secure the electric steel necessary for production, resulting in longer lead times, and higher prices for customers.

Electrical Steel Shortages and Solutions

Also from 2022 please consider the Horizon Technology article Electrical Steel Shortages and Solutions.

“Producers have been notified that they will be on allocation, essentially rationing, for electrical steel for all of (2022), with most expecting to get only 80% to 90% of purchase requirements. The impact of the electrical steel shortage could potentially be as damaging to the global economy in 2022 and 2023 as the semiconductor shortage (was in 2021).”That's also from 2022. Here is another, more current, article regarding transformers.

Massive Power Transformer Shortage

On March 11, 2023, NewScientist reported a Massive Power Transformer Shortage is Wreaking Havoc in the US.

A nationwide shortage of power grid transformers is causing delays across the US for everything from infrastructure for electric vehicles to new homes
Across the US, new houses sit unfinished – construction can’t be completed until they are connected to the electricity grid. Utility companies worry about how quickly they can restore power after damage caused by hurricanes and other natural disasters. And nationwide efforts to modernize ageing electrical grids face delays of months or even years.
All this is happening because of a national shortage of electrical distribution transformers. These devices convert the high-voltage electricity from power lines into lower voltages suitable for homes and businesses, … [Rest is Paywalled]

Electrical Steel Sources and Pricing

Returning to the Wall Street Journal ...

More than 80% of the electrical steel produced comes from China, Japan and South Korea, all countries that are subject to U.S. tariffs or quotas on steel imports, industry analysts said.

The slow, exacting process required to melt, cast and roll electrical steel, which can be less than a quarter of a millimeter thick for the highest grade, holds down production volumes and dissuades many steel companies from making it, executives said.
High-grade electrical steel used in electric-car motors sells for $2,400 to $2,800 a ton, compared with about $1,100 for commodity-type hot-rolled sheet steel, according to analysts.
“We’re going to go through shortages,” said Lourenco Goncalves, chief executive of Cleveland-Cliffs. “Shortages generate higher prices.”
In North America, which already relies on imports of electrical steel, demand for high-grade electrical steel is expected to reach nearly 780,000 tons by the end of the decade.
Steel-industry executives said that creating more domestic capacity to make electrical steel for vehicles will likely take years, as steel companies acquire equipment and become proficient at the exacting production process.