Global "transformer shortage"! China's exports surged 61% in two months, exports to the US soared by 182%, and the shortage in the US may persist until 2028.
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The global power transformer market is facing a severe supply-demand imbalance, while Chinese manufacturers are accelerating their efforts to seize international market share as a result.
According to Zhuifeng Trading Desk, Goldman Sachs stated in its latest research report released on March 26 that in January to February 2026, China’s exports of transformers above 10MVA increased by 61% year-on-year, accelerating further compared to the 52% growth in all of 2025; among them, exports to the US stood out, surging by 182% year-on-year.
At the same time, Goldman Sachs has raised its forecast for the US transformer supply-demand gap—originally anticipated to narrow from the current 72% to 57% by 2028, the estimate has now been revised upward to around 60%, meaning the shortage will last longer than previously expected.
The root of the supply-demand imbalance lies in the rapid expansion of demand and a serious lag in local production capacity. Accelerated data center construction and power grid modernization have jointly pushed up transformer demand in the US and Europe, while the delivery cycle for large transformers has been extended to 18–30 months.
Goldman Sachs estimates that from 2027 to 2028, US transformer demand will rise by 9%–12% thanks to additional contributions from data centers, but the expansion of local capacity will be only about 2%–4%, with the gap continuing to widen, creating significant opportunities for non-traditional suppliers such as China, South Korea, Brazil, and Turkey.
US Local Capacity Expansion Seriously Lagging Behind, Supply-Demand Gap Continues to Widen
According to Goldman Sachs, in Q1 2026, major global transformer manufacturers announced expansion plans one after another, but most of the new capacity will only become operational in 2027-2028 or even later.
On March 10, GE Vernova announced an investment of $200 million in a transformer factory in Haiphong, Vietnam, mainly for high-voltage direct current transmission projects, with production expected to begin in 2028. Siemens Energy announced in February an investment of a total of $1 billion in several US states, including $421 million to expand large power transformer capacity at its North Carolina plant. Based on this, Goldman Sachs estimates that this expansion will increase local US transformer capacity by only 2%–4% in 2027–2028.
Meanwhile, in February this year, Goldman Sachs’ US team raised its forecast for data center electricity consumption. Accordingly, US transformer demand is expected to increase by 9%–12% from 2027 to 2028. The pace of capacity expansion lags far behind demand growth, and the supply-demand gap is not decreasing but increasing. Goldman raised its estimate of US transformer import dependence from the previous 57% to about 60%, with China currently accounting for about 4% of US demand and overall import meeting about 72% of total US demand.
China’s Exports Accelerate Across the Board, Volume and Price of Exports to US Both Rise
Against the backdrop of the global supply-demand imbalance, China’s transformer exports are entering a fast track. From January–February 2026, the export value of China’s large power transformers (>10MVA) reached 4.4 billion yuan, a year-on-year increase of 61%, accelerating from the already strong 52% annual growth in 2025 (total exports in 2025 were 22.5 billion yuan).
In terms of export destination distribution, the Middle East contributed the most (34% share, 32% YoY growth), Asia had the fastest growth (26% share, 151% YoY growth), Europe accounted for 21% (36% YoY growth), the Americas 14% (45% YoY growth), and Africa 6% (344% YoY growth).
Among them, exports to the US were particularly outstanding. From January to February 2026, China’s transformer exports to the US increased by 182% year-on-year, a major jump from the 48% growth for all of 2025. In terms of product structure, exports to the US constitute about 59% for 10–220MVA, 20% for 220–330MVA, and 20% for above 330MVA. Despite this, China currently accounts for only about 4% of the US transformer market, while the US relies on imports for approximately 72% of its transformer supply, leaving ample room for further penetration of Chinese products.
In terms of pricing, the average unit price of China’s transformer exports to the US has shown an overall upward trend. According to Goldman Sachs, the average export price of Chinese transformers to the US rose by 6% year-on-year from January to February 2026. For the high-capacity 220–330MVA segment, the 3-month rolling average price (December 2025 to February 2026) rose by 53% year-on-year; for the 10–220MVA segment, the average price fell by 14% year-on-year due to product structure changes, with large fluctuations in the data.
In addition, in the US domestic market, the producer price index (PPI) for power and special transformers had already doubled compared to 2020, with a slight further increase in December 2025 and remaining flat month-on-month since 2026, but still up 6% year-on-year. Goldman Sachs noted that the period of “super inflation” in 2022 has passed, but prices remain at historically high levels. For key raw materials for transformers, the price of grain-oriented electrical steel (GOES) stabilized since 2026 after a sharp rise in 2022; copper prices continue to rise, putting some pressure on costs.
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The above highlights are from Zhuifeng Trading Desk.
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