Morning Market Report

I. Domestic Market Dynamics

1. Transformer production continues to grow

   In 2025, China's transformer output is expected to exceed 2.2 billion kVA, mainly benefited from the accelerated landing of ultra-high voltage projects and increased demand for new energy power generation. 2022-2025 average annual growth rate of production is about 5%, and in 2024 the output reached 2.163 billion kVA.  

  In the cost structure, copper material accounts for the highest (30)%, followed by oriented silicon steel (25)% and transformer (15%).  

2. Policy-driven green transformation

  Environmental policy to promote dry-type transformers, amorphous alloy transformers and other energy-efficient products popularization, enterprises to increase investment in research and development to cope with low-carbon requirements.  

3. Extra-high voltage construction into the peak period

  In 2025, the planning of 15 new ultra-high voltage lines (9 straight 6 cross), driven by converter valves, combinations of electrical and other core equipment demand, leading enterprises to further concentrate market share.  

II, The international market trends

1. Export market recovery  

  In 2023, China's transformer exports exceeded 23 billion yuan, an increase of 50% year-on-year; 2024 the first three quarters of exports increased by 7.9% year-on-year, the U.S. distribution transformer market due to the local supply constraints, China's production capacity to accelerate the sea.  

  Global market size is expected to reach 51.5 billion yuan in 2027, with a compound annual growth rate of 7.79%, the Asia-Pacific region accounted for more than 40%, China is the largest production and consumption countries.  

2. Overseas demand differentiation

  European main grid expansion (54,000 kilometers of offshore transmission planning) and smart meter penetration rate in developing countries to promote the demand for high-voltage equipment and distribution automation.  

III. Technological Innovation and Competitive Landscape

1. Intelligent and new material application

  Internet of things, big data technology to achieve remote monitoring of transformers and energy efficiency optimization; environmental insulation materials and efficient cooling system to improve product performance.  

2. Increased competition  

  Market concentration is low, TBEA, China Xidian and other head enterprises dominate the high-voltage field, foreign enterprises (such as ABB, Siemens) still account for 20%-30% share.  

IV. Risks and Prospects

Challenges: raw material price fluctuations, international trade policy uncertainty (such as U.S. restrictions on imports of high-voltage equipment) and environmental standards upgrade pressure.  

Opportunities: new energy grid, smart grid construction and “Belt and Road” along the infrastructure demand will continue to release market potential.