Power transformer oversupply signs intensified

With the advent of a new round of investment boom in power grid, power transmission equipment manufacturing enterprises will be at full capacity, show a very prosperous production and sales situation in the next few years. And as an important branch of the transmission and distribution industry, the transformer manufacturing industry is singing all the way. As China's west to east, north and south, the implementation of national networking, transformer demand will remain steady growth. Overall, compared with foreign advanced countries, China's power transformer technology is still in the level of the early 1990s, only a small amount of the level of the late 1990s, there are still some gaps.

Opportunities and Challenges
According to the state's "Tenth Five-Year" plan for the power sector, China will add 25 million kilowatts of installed capacity from 2004 to 2005, with an annual investment of about 240 billion yuan, an increase of about 40%. Investment proportion in power station equipment was about 50% to 60%; grid equipment investment accounted for about 30% to 40%. Coupled with the State Council’s approved total investment of 51.2 billion yuan of 13 new power plant construction projects, the transformer industry's annual demand is expected to 360 million to 400 million kVA. According to statistics, in 2003, in the power transmission industry, only the transformer industry sales revenue increased by an average of 30% or more, the industry total profit growth of 40% or more. However, high output growth does not mean high profits.
At present, China's transformer market has emerged signs of oversupply, price competition is increasingly fierce and cruel. This can de seen from domestic and foreign transformer business profit margins on a low side. Take a sample of dry-type transformer, in 1995, its average profit margin was 22%, due to the influx of manufacturers, had dropped to about 5% after six years, and because steel, copper and other raw material prices continue to rise, the transformer industrycan not sit back and relax. Now, due to serious excess capacity, dry-type transformer has been included in the list of restricted development.
Before 1995, there are only 100 transformer enterprises, and by the end of 2003, the whole industry has grown to more than 1,000. For 500 kilovolt high-end transformer market is slightly better, mainly due to price competition and marketing strategies in the low-end transformer manufacturers, the market became more chaotic, there is possibility of low-price sales. With the growing competition among manufacturers, only 20 to 30 companies in the future can occupy most of the transformer market.
The influx of some large multinational companies in China occupy 20% to 30% of the transformer market, and expand market share by virtue of their advanced technology, strong capital and brand advantage, which gives domestic enterprises a huge impact. In order to gain a share in the market, many transformer manufacturers to introduce advanced production technology and equipment from abroad to further improve the product mix, product performance, explore the unremitting efforts of new technology, new materials to adapt to the development needs of the transformer.

Product development direction
1. The voltage level development to ultra-high pressure
Voltage level will be to 750kV, 1000kV. High cost of superconducting transformer has been the biggest obstacle to the market, of the superconducting transformer, superconducting material cost account for 70% to 80%. According to Wang Yishun researcher, superconducting materials use the PIT process, the experts are currently developing the use of spraying the second generation of superconducting materials , which will improve the mechanical properties and thermal properties of superconducting materials, , while greatly reducing the cost of materials, can make the superconducting transformer from the technology to market time greatly shortened.
2. Energy saving, miniaturization, low noise, high impedance, explosion-proof development
Such products are mainly small and medium-sized, such as the new S9-type distribution transformers; volume core transformers, amorphous alloy transformers, sealed transformers, combined transformers, dry type transformer, high ignition oil transformers, SF6 gas insulated transformers recommended to use in the city network, rural power grids. China will introduce preferential policies to encourage the replacement and transform of old high-energy transformers, develop and promote the production and sales of efficient transformers.
In summary, China's transformer business should be aware of the opportunities and challenges. As soon as possible to improve the means and conditions of testing, mainly refers to the PD test, should have a special shielding laboratory, so as to make the test data have credibility, products are competitive. According to the status of transformer development and input of high voltage, high-capacity transformer, the management of the industry sector is proposed to revise the existing standard timely. Enterprises should seize this historic opportunity to meet new challenges, restart the information construction, complete transformation of the old enterprise management system, and embark on a new type of development path with international practice. Enterprises should expand large-scale production capacity, in order to ensure the development of enterprises into a healthy and fast lane.


Shandong Tailai Electric Co.,Ltd
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