Export value hits a record high—Chinese transformers are selling like crazy overseas!

China's transformer exports reached a record high in 2025, highlighting the value of China's supply chain against the backdrop of a global shortage of power grid equipment and soaring prices. This supply-demand mismatch, driven by data center construction and electrification, is reshaping the global power equipment market landscape and offering Chinese manufacturers continued order growth opportunities.

According to data from the General Administration of Customs, China's transformer exports in 2025 reached a record 64.6 billion yuan, an increase of nearly 36% year-on-year. The average export price per transformer rose to 205,000 yuan, about one-third higher than the previous year. This growth coincides with a severe global shortage of key power grid infrastructure equipment such as transformers.

Previously, State Grid announced that during the 15th Five-Year Plan, its investment scale will reach 4 trillion yuan, setting a historical high and increasing by 40% over the 14th Five-Year Plan.

Energy consulting company Wood Mackenzie estimates that as the world's largest transformer buyer, the United States is facing about a 30% supply gap, and the supply shortage may persist into the 2030s. BloombergNEF data shows that global grid investment exceeded $480 billion for the first time in 2024, with strong growth momentum likely to continue in the coming years.

As a result, on January 19, A-share power grid equipment sector performed strongly, with stocks like Shuangjie Electric, Han Cable, Dalian Insulator, China XD, Baobian Electric, XJ Electric, and Pinggao Electric hitting daily limits. The grid equipment ETF rose 6.39% intraday, with a net inflow of funds for seven consecutive trading days, totaling over 4 billion yuan. Its latest size reached 8.575 billion yuan, a record high since its inception.

Data Centers Become the Core Driving Force for Demand Surge

Driving order growth for Chinese manufacturers is not only overseas modernization upgrades for aging power grids, but also the global data center construction boom. Guotai Haitong Securities analysts Xu Qiang and Fang Qing’s team previously released a research report noting that the global data center market size will grow from $242.72 billion in 2024 to $584.86 billion in 2032.

The report emphasizes that data centers’ electricity demand is growing exponentially, with half of the demand met by renewable energy generation. This means that both substations on the grid side and new energy power stations on the generation side are seeing simultaneous surges in demand for transformers and switches. Transformers are crucial for converting high-voltage electricity to low-voltage, making them indispensable infrastructure for power grids.

Supply Shortages Difficult to Bridge in Short Term

Guotai Haitong Securities’ report points out that although new global investment plans have been announced, capacity expansion takes time and orders are currently seriously backlogged. Based on IEA data, delivery cycles are expected to remain long in 2025.

The research report predicts that in 2025, U.S. power transformer demand will exceed supply by about 30%, and the gap for distribution transformers will reach 10%. This supply-demand imbalance has directly led to soaring prices. Since 2020, the global power transformer price index has risen by 1.5 times, with prices for some complex models reaching 2.6 times their pre-pandemic levels.

Guotai Haitong Securities analysts believe that when demand surges rapidly in the short term and transformer production capacity takes time to grow, it creates a bottleneck in the supply chain. In the context of global shortages, Chinese companies stand to fully benefit from this infrastructure restocking cycle.

China's Supply Chain Advantages Continue to Strengthen

Research data shows that China's transformer exports account for a quarter of the global total. Since 2018, the power transformer trade volume in European and American markets has doubled, indicating heavy reliance on imports. Against the backdrop of acute shortages of grid equipment in Europe and the U.S., China’s supply chain value is further highlighted.

The domestic market also provides strong support. On January 15, State Grid announced that its fixed asset investment during the 15th Five-Year Plan is expected to reach 4 trillion yuan, a 40% increase over the 14th Five-Year Plan, to be used for new power system construction. On January 17, the National Energy Administration announced that China's total electricity consumption in 2025 will historically surpass 10 trillion kWh, reaching 10.4 trillion kWh, a 5% year-on-year increase.

China's investment in building a renewable energy-based super grid is creating sustained domestic demand growth opportunities for transformer manufacturers.

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