With the rapid development of economic construction, China has repeatedly invested in power supply construction and power grid reconstruction projects, and has strongly driven the continuous growth of market demand for various types of transformers. Especially under the support of the government's strong support for the revitalization and development of national equipment manufacturing industry, China's transformer industry has made considerable progress, showing a sustained high-speed development trend.

The development of the industry is still worrying

Transformer is one of the key equipments in power system. Its performance directly affects the safety and reliability of power grid operation. The transformer's design and manufacturing capabilities represent the comprehensive technological level of the entire power equipment industry. After years of development, China's transformer design and manufacturing technology has been very mature. Not only has the total transformer production volume ranked among the top in the world, but it also has mastered a large number of power transmission and transformation from 750 kV to 1000 kV high voltage AC and ±800 kV UHVDC. The core technologies developed by key equipment have continuously enhanced international competitiveness.

However, behind the rapid development of the transformer industry, there are still various problems and hidden concerns. At present, the most prominent problem is low-price competition and disorderly competition, which seriously disrupts the market order. Recently, several transformer manufacturers have reflected that the current low-price competition and vicious competition in the industry are becoming more and more serious, and this price war has spread from low-voltage small- and medium-capacity products to high-voltage and large-capacity products. It has already been applied to transformer manufacturers and even entire transformer manufacturers. The industry caused great harm.

Particularly worrying is that if it is allowed to develop, it will be a matter of time before it hurts the users. Because, the result of this low-price competition is bound to be no winner, "who in the end can not afford to hurt."

Data show that: China's annual transformer demand is about 1.5 billion kVA. At the same time, China's transformer industry is huge, with a large number of small and medium-sized enterprises, and low industrial concentration. The annual production capacity is about 3 billion kVA, which is in a state of serious excess in the market.

Since 2009, the speed of national power construction has slowed down, and the demand for domestic transformers has decreased. In particular, equipment-demanding companies have adopted centralized tendering to purchase transformers. As a result of low-cost bids, market competition has become unprecedentedly fierce, which has also led to equipment manufacturers. The price cut competition. At present, the final price of some transformer products is only 80% of the cost of raw materials.

Enterprise average profit rate goes into "negative era"

The research report shows that in the 1970s and 1980s, the average profit rate of China's transformer industry was about 20%; around 2010, it was about 8%. Today, most transformer manufacturers' average profit margins of 750 kV and below products have entered a “negative era”, which has directly led to the low efficiency operation of China's transformer manufacturers in recent years. In order to survive, enterprises can only reduce R&D investment, look for low-cost materials to spread costs, and even appear the situation in which transformer companies sacrifice product quality and engage in malicious competition. The market order is increasingly chaotic.

It is understood that not only low-voltage, medium- and small-capacity transformers have become the hardest hit in the price war, but even high-voltage, high-volume products with relatively high technological content and a small number of manufacturers have not been spared, and the price war is getting worse. Strong, and the areas involved are showing a trend of further expansion. From the power supply to the grid, from wind power to photovoltaics and other new energy industries are not spared.

According to statistics, from the year 2012 till now, 30 million thermal power units and 57 600,000 thermal power units have been tendered, and the proportion of projects with the lowest and lowest bids has reached 78%; in the past three years, conventional thermal power main transformers The price of the winning bids has dropped by more than 15%, and many transformer manufacturers have suffered losses or serious losses. In addition, due to the lower barriers to entry for the wind power and photovoltaic industries, it is a mixed bag. The difference between the highest and the lowest bid price is more than 20%, which directly leads to an endless stream of product quality problems.

According to a company chief who researches and develops high-voltage and large-capacity products, the result of this price war and vicious competition has caused long-term “bleeding” by manufacturing companies. Especially in the country's slowdown in power construction, reduced investment, and shrinking market demand, the price war has further accelerated the situation in which manufacturing companies are in dire straits, and it is even difficult. He said that in the long run, a group of Chinese national transformer core backbone enterprises elaborately cultivated by the state will not be able to survive or will decline.