Analysis of the 2024 US Power Transformer Market
Writer： Hengfeng you electric Time：2024-10-09 views：times
This article will be introduced by MANN, the sales manager of Hengfengyou Electric, to the US power transformer market. What opportunities and challenges will this bring to China's power transformers?
I、 The power transformers in the United States are severely aging. Most of the power grids were built in the 1960s and 1970s, which are very backward and severely aging. More and more transformers have reached a service life of 30-50 years, exceeding 80%; Large scale power outages caused by equipment aging and technical failures occur frequently, and there is an urgent need for updates and replacements, which creates a significant demand space for power transformers. However, due to the insufficient capacity of local factories in the United States, the power transformers needed for the power grid need to be imported from abroad (such as China, Mexico, Türkiye, South Korea, etc.). It seems that there is a huge market in the United States for the replacement of power transformers, full of opportunities and challenges.
II、 The construction and demand for new energy in the United States are also significantly increasing. In recent years, with the development of new energy in the United States, the growth of power generation, electrification, and multiple fiscal policies have accelerated manufacturing construction expenditures. The corresponding power grid needs to be upgraded, which in turn has driven the increase in demand for solar and wind power transformers, resulting in a year-on-year increase. In addition, the United States has a huge planning volume in the new energy cluster industries such as photovoltaic and wind power, which will reach 60% in the first half of 2024. The revenue and orders from the electrical equipment business in the American market have significantly accelerated.
III、 There are many large-scale engineering projects in the United States to drive the demand for power transformers. Driven by industrial reflux, the cumulative value of related large-scale projects in North America with a single project of over 1 billion yuan has reached 859 billion US dollars from 2021 to 2024, of which the value of electricity related projects accounts for about 3% to 5%, corresponding to 25.8-43 billion US dollars. By the end of 2024, the total amount of large-scale projects has increased to $933 billion, and the construction period of these large-scale projects is generally 1 to 3 years or more. This type of project with a large amount of money and a long production and construction cycle is expected to continue to increase in demand in the future.
IV、 At present, the United States still faces the problem of supply side shortage, which is a common issue in the US power transformer market. According to MANN, the sales manager of Hengfengyou Electric, the production capacity of domestic transformer factories and important material silicon steel in the United States can only meet 40% of the local market demand. With unchanged demand, even if the domestic transformer production capacity in the United States doubles, the demand for transformer imports will still exist. The United States imposes a 25% tariff on imported oriented silicon steel and power transformers from other countries, further limiting the supply sources.
V、 Given the above market supply-demand imbalance, this is a historic opportunity for Chinese power transformer manufacturers. As one of the global power transformer supply markets, China has multiple advantages in technology, cost-effectiveness, policy support, and is currently accelerating its overseas expansion. Until 2024, China's exports of power transformers to the United States will increase by a compound annual growth rate of 44%; The potential substitutable space for other importing countries in 2024 is close to 5.2 billion US dollars.
In summary, MANN, the sales manager of Hengfengyou Electric, believes that in the future, the US power transformer market will continue to face a situation of supply shortage but demand growth. The support of domestic policies in China has also provided numerous export opportunities and conditions for the Chinese power transformer market. Policy support will also drive investment in power grid infrastructure, further promoting the development of the global power transformer market.
