"The delivery cycle of transformers in the US has exceeded 120 weeks, and their prices have quadrupled; in Europe, orders have soared by 95%, but they are stuck in the predicament of 'having demand but no production capacity' - behind this global transformer shortage, manufacturing in China is becoming the key to solving the problem."
I. Global Transformer Shortage: The Root Cause of a 3-Year Delivery Cycle and a 40% Price Surge
Severe imbalance between supply and demand, with a surge in demand: The growth of new energy (wind power, solar power) and the upgrading of the global power grid have driven a sharp increase in transformer demand. Global power grid investment is expected to exceed 450 billion US dollars in 2025. The construction of ultra-high voltage power grids and the replacement of old equipment (such as the elimination of transformers below S9 in China) have created rigid demand. Supply shortage: The delivery cycle of transformers in the United States has extended from 75 weeks in 2022 to 120 weeks in 2025, and the delivery cycle of main transformers has doubled; the global capacity gap exceeds 100,000 MVA, with the situation being particularly severe in North America, the Middle East, and Africa.
1. Shortage of raw materials and soaring prices of silicon steel: The average price of high magnetic permeability oriented silicon steel (B23R075) reached 18,000 yuan/ton in 2024, up 40% from 2019, directly increasing the manufacturing cost of transformers. Delay in capacity expansion: The construction period of transformer factories is 1-2 years. Coupled with the slow expansion of silicon steel production (new capacity from Baowu Steel and others won't be released until 2026), the supply-demand contradiction is difficult to be resolved in the short term.
II. China's Capacity Breakthrough: The "Hard Power" Behind a 35% Global Share
Export surges against the trend, reaching new highs in amount: In 2024, China's transformer export volume exceeded 6.7 billion US dollars, doubling that of 2019; in Q1 of 2024, the export growth rate was 30%, with a 95% growth rate in the European market (8.1 billion orders), and a 49% growth in South America. Advanced transformation: The annual output of dry-type transformers (high safety, oil-free and environmentally friendly) will reach 380 million kilovolt-amperes; the penetration rate of intelligent transformers will increase from 28% in 2025 to 65% in 2030, with a premium capacity of 30%-40%.
1. Dual advantages of technology and cost: Advanced non-crystalline alloy technology: The no-load loss of China's non-crystalline alloy iron core transformers is 50% lower than international standards, making it a preferred choice for upgrading power grids in Europe and America. Vertical integration for cost reduction: Leading enterprises such as TTE Electric have achieved cost reduction by integrating the industrial chain (such as self-production of silicon steel), and their manufacturing costs may decrease by 8%-10% after 2026.
III. Price has skyrocketed by 40%! Who benefits? Who gets eliminated?
Chinese enterprises are seizing global market share, with a market share of 35%: Chinese transformers account for 35% of global production, and North America relies on Chinese imports (accounting for 32% of its share). TTE Electric's overseas revenue growth rate is 25%. Price competitiveness has improved: For intelligent transformers and models used in new energy (wind power/pv transformers), the price premium is 30%-40%, and the gross profit margin has exceeded 25%.
1. Overseas manufacturers are in a disadvantaged position. Hitachi Energy has issued a warning: Due to insufficient production capacity, deliveries have been delayed. Local manufacturers in Europe and the United States have been forced to source from China due to the shortage of silicon steel sheets and environmental regulations (EU carbon border tax).
IV. Future Trends: From "Price War" to "Technology War"
Green transformation accelerates: China's "carbon neutrality" policy forces the elimination of high-energy-consuming transformers, the EU requires a 30% reduction in carbon footprint, and the penetration rate of vegetable oil transformers will increase to 35%.
Smart grid upgrade: Digital twin technology enables fault prediction, while AI operation and maintenance systems (such as the "Smart Doctor" of Guangdong Huajing) reduce the risk of downtime.
"The shortage of transformers is a challenge, but it is also an opportunity to restructure the global supply chain - as Chinese manufacturing transforms from a 'price butcher' to a 'technology pillar', the pulse of the world's power grid is now in the hands of the East."