American companies have informed the Biden administration through a letter about an electricity steel shortage in the country. Electrical steel is a material of critical importance for the production of power plants and electric vehicles. U.S. national associations believe there is a shortage of electrical steel and that the President needs to take steps regarding the transition to electric vehicles. The letter proposes organizing a national conference with representatives from each sector to discuss the current issues and propose solutions.
Discussions about the shortage of electrical steel have been ongoing in the United States and worldwide since 2022, and it is believed to be as critical as the semiconductor crisis. According to a report by The Wall Street Journal in March 2023, the global demand for electrical steel is projected to reach 2.8 million tons by 2027, with an expected shortfall of 300,000 tons. By the end of the decade, this gap is estimated to increase to 780,000 tons.
Even the implementation of new projects will not be able to prevent the impending shortage. For example, projects such as U.S. Steel starting electric steel production at the Big River Steel facility and Cleveland-Cliffs, which holds a virtual monopoly in the current market, launching new production lines.
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