The total value of China's transformer exports in 2025 reached a record high of 64.6 billion yuan, a year-on-year increase of nearly 36%.Guotai Haitong Securities pointed out that the demand for power in data centers is growing exponentially. It is expected that by 2025, the shortage of power transformers in the United States will exceed 30%, and the shortage of distribution transformers will reach 10%. China's transformer exports account for a quarter of the global total.

Since 2018, the trade volume of power transformers in the European and American markets has doubled, and the region heavily relies on imports.

1、 Export volume and price both rise, highlighting the value of China's supply chain due to global supply-demand tension

• China's transformer exports will reach a historic high in 2025. Against the backdrop of global power grid equipment shortages and soaring prices, the value of China's supply chain is becoming increasingly prominent.This supply-demand mismatch driven by data center construction and electrification processes is reshaping the global power equipment market landscape. This has brought sustained order growth opportunities for Chinese manufacturing.

• According to data from the General Administration of Customs:

By 2025, the total value of China's transformer exports will reach 64.6 billion yuan, a year-on-year increase of nearly 36%；The average export price of a single transformer has risen to 205000 yuan, a year-on-year increase of about one-third；This growth comes at a time when global power grid infrastructure equipment such as transformers are facing severe shortages

• Previously, State Grid announced:During the 15th Five Year Plan period, the investment scale will reach 4 trillion yuan, setting a new historical high and increasing by 40% compared to the 14th Five Year Plan.

• Energy consulting firm Wood Mackenzie estimates that:As the world's largest transformer buyer, the United States is facing a supply gap of approximately 30%,The supply shortage situation may continue until the 2030s,Global power grid investment exceeds $480 billion for the first time in 2024, and strong growth momentum is expected to continue in the coming years.

• Affected by this, the A-share power grid equipment sector performed strongly on January 19th:Multiple stocks including Shuangjie Electric, Hanhua Cable Co., Ltd., Dalian Electric Porcelain, China Xidian, and Baobian Electric Co., Ltd. hit the daily limit up The intraday increase of the power grid equipment ETF reached 6.39%.The ETF has received net inflows of funds for 7 consecutive trading days, totaling over 4 billion yuan.The latest scale has reached 8.575 billion yuan, setting a new high since its establishment. 

Performance of some individual stocks on the same day:

 2、 The explosive demand for data centers has become the core driving force

• The growth of manufacturing orders in China is driven by both the modernization and renovation of old power grids overseas and the global data center construction boom.According to a research report by Guotai Haitong Securities analysts Xu Qiang and Fang Qing's team:The global data center market is expected to grow from $242.72 billion in 2024 to $584.86 billion in 2032.The demand for electricity in data centers is growing exponentially, with half of the electricity demand being met by new energy sources,This means that both the substations at the access end and the new energy stations at the power generation end are experiencing a simultaneous surge in demand for transformers and switches.Transformers are essential equipment in power grid infrastructure, used to convert high voltage electricity into low voltage electricity

3、 The supply gap is difficult to bridge in the short term

• According to a research report by Guotai Haitong Securities, although new investment plans have been announced in the global market, capacity expansion takes time and there is currently a serious backlog of orders.According to IEA data, it is expected that the delivery cycle will remain at a high level in 2025.

• Research report prediction:By 2025, the demand for power transformers in the United States is expected to exceed supply by 30%, with a distribution transformer gap of 10%.This supply-demand mismatch directly leads to a surge in prices.Since 2020, the global power transformer price index has risen 1.5 times,The prices of some complex models have reached pre pandemic levels.

--Data source: IEA "Energy and AI", Guotai Haitong Securities Research)

• Order backlog (green bar): Overall, there is an upward trend from 2020 to 2024, with a significant increase in 2024

• Price Index (Blue Curve): Continuously climbing from 2020 to 2024, reaching approximately 1.5 times the level of 2020 in 2024

• Analysts from Guotai Haitong Securities believe that when demand erupts in the short term and the increase in transformer production capacity takes time, transformers will become a bottleneck in the supply chain.

• Against the backdrop of global shortage, Chinese companies are expected to fully benefit from this wave of infrastructure replenishment cycle.

4、 China's supply chain advantages continue to strengthen

• The research report data shows that:China's transformer exports account for a quarter of the global total.Since 2018, the trade volume of power transformers in the European and American markets has doubled, demonstrating their heavy dependence on imports,

Against the backdrop of extreme shortage of power grid equipment in Europe and America, the value of China's supply chain is further highlighted

• The domestic market also provides strong support:State Grid announced on January 15 that during the "15th Five Year Plan" period, the company's fixed assets investment is expected to reach 4 trillion yuan, an increase of 40% over the "14th Five Year Plan" period, for the construction of new power systems.On January 17th, the National Energy Administration announced that by 2025, the total electricity consumption in China will break through 10 trillion kilowatt hours, reaching 10.4 trillion kilowatt hours, a year-on-year increase of 5%. China's investment in the construction of a renewable energy based super grid is creating sustained domestic demand growth space for domestic transformer manufacturers.