America's Data Center Transformers Run on One Company's Steel, and the Wait Is Now 160 Weeks
Cleveland-Cliffs is the only American producer of the grain-oriented steel inside data center transformer cores, and Washington spent three years deciding whether to regulate it out of the market. Substation lead times are past 160 weeks.
Lourenco Goncalves spent part of this month defending a steel mill in western Pennsylvania against a federal energy-efficiency rule. Goncalves runs Cleveland-Cliffs. The mill is Butler Works, and it rolls the grain-oriented electrical steel that sits inside data center transformers and inside almost every other transformer on the American grid. Cliffs is the only company in the United States that makes it.
That's the whole domestic supply. One company, two plants, one in Pennsylvania and one in Ohio, under everything.
Why a Data Center Transformer Now Takes 160 Weeks
Substation transformer lead times ran about 140 weeks back in 2023. They're past 160 weeks now, per Wood Mackenzie research director Ben Boucher. Call it three years and a bit to take delivery of a machine that does one job, which is stepping voltage up or down. Switchgear runs closer to a year, and in this market a year counts as the fast option.
The demand side explains the queue. Wood Mackenzie has US transformer demand running near 1,500 units a year today, and going past 9,000 by 2030. Data centers were under 2% of American electrical equipment demand in 2020. They take as much as 40% of it by 2030, on Wood Mackenzie's numbers. The market itself goes from $20 billion in 2025 to $65 billion at the end of the decade.
Every one of those units needs a core, and the core is where the steel goes.
What's Actually Inside the Core
A transformer core is a stack of thin steel sheets, and that's most of what a transformer is. Grain-oriented means the mill rolls and anneals the steel until the crystal grains inside it line up with the direction the magnetic field runs. Line the grains up and the core wastes less energy as heat every time the current reverses, which it does sixty times a second, forever. Ordinary steel doesn't do that, so you can't substitute it and you can't hurry it.
Butler rolls the regular grain-oriented grades and makes TRAN-COR, which Cliffs calls the only high-permeability electrical steel produced in the country. The plant employs more than a thousand people, represented by UAW Local 3303. Cliffs is putting $195 million into a hot mill expansion there that adds about a quarter more production, and the Butler Eagle has it finishing in 2028. The Department of Energy is covering $75 million of that. (A federal grant to the mill, while a federal rule threatens the mill's main product. Both things are true at once.)
Cliffs also runs an electrical steel plant at Zanesville, Ohio that turns out grain-oriented grades. Two plants, then, and one owner.
The Rule That Nearly Wrote Butler Out of the Transformer Market
In 2023 the Department of Energy proposed making distribution transformers move to amorphous cores by 2027. Amorphous ribbon is metal cooled so fast the atoms never line up into crystals at all. It's a different material with a different supply chain, and hardly any of it gets made here. The April 2024 final rule backed off. Compliance slid to 2029, and roughly 75% of distribution transformers got to keep grain-oriented cores.
Then it reopened. A presidential determination in April 2026 named grid supply chains, electrical core steel included, essential to national defense. DOE opened a fresh review of the 2024 standard in June, and utilities filed against changing it in July, which is its own kind of funny when utilities are the ones sitting in the 160-week line.
Goncalves argues that amorphous steel can't do the job for 90 to 95% of American transformers, and that foreign suppliers serve their own grids first when things get tight. The union local made a more physical point. Amorphous cores are bigger and heavier, so a lot of concrete pads and vaults would need rebuilding to hold them.
Who Books the Revenue on Data Center Transformers
The country imports roughly 80% of its large power transformers, and that isn't changing this decade. New domestic capacity is arriving in modest pieces. Hitachi Energy is building a $457 million transformer plant in South Boston, Virginia. Hyundai is putting $200 million into Montgomery, Alabama. Siemens Energy is spending $150 million in Charlotte.
Those are all private or foreign-listed. For public exposure you're looking at order books.
GE Vernova booked $6.3 billion of Electrification orders in the second quarter and carries $44.6 billion of backlog in that segment. Its data center orders inside Electrification cleared $5 billion in the first half, more than double all of last year. Powell Industries did something stranger. Powell booked a record $934 million of orders in its fiscal third quarter on $312 million of revenue. Book-to-bill came in at 3.0x, so Powell took in three dollars of new orders for every dollar it shipped. Backlog reached $2.4 billion, and a single data center award accounted for more than $400 million of it. That one is behind the meter, meaning the campus makes its own power instead of buying it from the utility.
Cliffs is the odd one out here. The mill that everything runs through belongs to a steelmaker whose main customer is the auto industry, and electrical steel is one line in that business. Cliffs is the choke point without being the trade. The money lands at GE Vernova, Powell, Eaton, Hubbell and nVent, on order lines that convert to revenue over the next two to three years.
Whichever way the rule lands, Cliffs is still the only American company rolling this steel when it takes effect. And 160 weeks from now is 2029.