1. Top-Level Policy Support Strengthens, Anchoring Low-Carbon Transformation and Energy Efficiency Upgrading
During the 15th Five-Year Plan period, China's iron, steel and metallurgical industries adhere to the orientation of green, low-carbon and high-quality development. A number of policies clarify the development path for the furnace transformer industry from the dimensions of capacity structure, energy efficiency standards and technological upgrading.
In terms of steel capacity transformation, the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT) continue to promote steel industry capacity replacement and short-process steelmaking development, explicitly allowing equivalent replacement for converting converters to electric arc furnaces, and driving the steady increase of the share of EAF steel. According to industry planning, the share of domestic EAF steel production is targeted to reach 18% in 2026 and strive to exceed 25% by 2030, directly driving the new and renewal demand for supporting EAF transformers. Meanwhile, the Special Action Plan for Energy Conservation and Carbon Reduction in the Iron and Steel Industry requires accelerating the energy efficiency transformation of old smelting equipment. Low-efficiency furnace transformers with a service life of more than 10 years are gradually included in the elimination and replacement list, and the stock technical transformation market continues to release demand.
In terms of energy-saving equipment policies, the Implementation Plan for High-Quality Development of Energy-Saving Equipment (2026–2028) lists industrial special transformers as a key upgrading field. It proposes to improve the energy efficiency level and overload capacity of electric arc furnace transformers, promote low-loss core materials, intelligent voltage regulation and harmonic suppression technologies, and drive furnace transformers to upgrade from "simple power supply equipment" to "energy efficiency control nodes". Some provinces and cities have also introduced special subsidy policies, granting technical transformation rewards to metallurgical enterprises adopting Class 1 energy-efficient furnace transformers, further accelerating product iteration.
In terms of the standard system, China has established a national standard system for furnace transformers covering all furnace types including electric arc furnaces, refining furnaces and submerged arc furnaces. Technical specifications for ultra-high power, high-voltage and intelligent products continue to be improved, with multiple indicators reaching the international advanced level, providing technical support for domestic equipment to participate in global competition.
2. Steady Market Expansion with Dual Drivers of Structural Upgrading and Export Growth
Currently, China's furnace transformer market presents a triple growth pattern of "domestic stock transformation + new capacity release + accelerated overseas exports", maintaining high industry prosperity.
In the domestic market, China's electric arc furnace transformer market reached RMB 8.46 billion in 2025, up 9.3% year on year; it is expected to reach RMB 9.25 billion in 2026, maintaining a steady growth trend. The product structure continues to upgrade toward high-end: ultra-high power (UHP) EAF transformers above 70 MVA account for 61.7%, and orders for new products with intelligent voltage regulation, dynamic reactive power compensation and harmonic suppression functions account for more than 65%, while the market share of traditional low-parameter, high-loss models continues to shrink.
Demand is driven by multiple factors: first, capacity expansion of EAF short-process steelmaking. In 2025, there were 47 new and technically transformed EAF projects in China, corresponding to strong demand for supporting furnace transformers. Second, renewal of stock equipment. Old furnace transformers with a service life of over 10 years have entered a peak replacement period, with an annual replacement market size of over RMB 3 billion. Third, extended demand from emerging industries. Capacity expansion in industries such as photovoltaic polysilicon, lithium battery anode materials and special alloys drives rapid growth in demand for special transformers for submerged arc furnaces and smelting furnaces, becoming a new growth engine for the industry.
Overseas markets serve as the core growth engine of the industry. According to industry statistics, China's furnace transformer exports reached RMB 572 million in 2025, up 23.6% year on year; it is expected to reach RMB 707 million in 2026, continuing the high growth trend. Export products are mainly medium and large power models above 35 MVA, mainly flowing to countries along the Belt and Road such as Vietnam, Indonesia, the United Arab Emirates and Turkey, adapting to the capacity expansion needs of local steel, non-ferrous metallurgy and mineral processing industries. Compared with European and American manufacturers, domestic furnace transformers have significant price advantages under the same technical parameters, and can be quickly customized according to project working conditions, with delivery cycles shortened to 6–8 months, showing outstanding competitiveness in emerging markets.
3. Multiple Technological Breakthroughs, High-End Equipment Achieves Independent Controllability
After years of technological accumulation, China's furnace transformer industry has evolved from following to keeping pace with, and leading in some fields, achieving core breakthroughs in high voltage grade, ultra-high power and intelligent energy saving.
In the field of high voltage grade, domestic equipment has achieved global leadership. In June 2026, the world's first 500kV-class industrial rectifier transformer, independently developed by Jiangxi Transformer Technology Co., Ltd., successfully rolled off the production line, with all items passing the test at one time. Customized for large overseas metal smelting projects, the product can directly step down voltage from a 500kV power grid to the voltage level required for smelting, eliminating the need for intermediate step-down substations. It can save hundreds of millions of yuan in infrastructure investment for a single project and over 30 million yuan in electricity costs per year, marking that China has broken the long-standing foreign technology monopoly in the field of ultra-high voltage industrial rectifier equipment and filled the gap in industrial application.
In the field of ultra-high power and intelligence, China has mastered a full set of core technologies. Domestic UHP EAF transformers above 120 MVA have achieved mass production, capable of withstanding frequent short-circuit shocks, wide-range voltage regulation and strong overload conditions, matching the efficient smelting demand of large electric arc furnaces. The intelligent furnace transformer system integrates functions such as real-time working condition monitoring, dynamic voltage regulation, harmonic management and fault warning, and can deeply coordinate with the EAF control system, reducing smelting power consumption by 3%–5% and equipment operation and maintenance costs by more than 20%, greatly improving production efficiency.
In the field of energy-saving and new material technologies, amorphous alloys, high-permeability grain-oriented silicon steel, three-dimensional wound cores and other technologies have been widely used in furnace transformer products. The no-load loss of ultra-Class 1 energy-efficient furnace transformers is more than 40% lower than that of traditional products, with significantly reduced whole-life carbon footprint. Dry-type maintenance-free furnace transformer technology is mature, adaptable to harsh smelting environments with high temperature, high dust and high corrosion, and can operate stably without fans and temperature control devices, greatly reducing on-site operation and maintenance difficulty.
4. Full Industrial Chain Advantages Highlighted, Chinese Furnace Transformers Accelerate Global Layout
The rapid rise of China's furnace transformer industry in the global market is rooted in a complete full industrial chain system, with multiple competitive advantages in technology, cost, delivery and service.
From the industrial chain perspective, China has built a complete industrial ecosystem from core materials and components to complete machine manufacturing and engineering services. Core raw materials upstream such as silicon steel sheets, copper materials, insulating parts and voltage regulating switches are all independently supplied domestically. The midstream has formed an industrial cluster covering R&D, design, manufacturing and testing. Downstream capabilities in installation, commissioning, operation & maintenance and EPC turnkey contracting continue to improve. The independent and controllable full industrial chain not only ensures supply chain stability, but also makes the comprehensive product cost 30%–40% lower than European and American manufacturers, with significant cost-performance advantages.
In terms of delivery and service capabilities, domestic enterprises can quickly respond to customers' customized needs by relying on large-scale production and flexible manufacturing capabilities. According to different working conditions, power grid conditions and standard requirements of overseas projects, enterprises can complete scheme design and manufacturing within 2–3 months, with delivery cycles significantly shorter than the 12–18 months of European and American manufacturers. Meanwhile, leading enterprises have established overseas service networks, providing full-process services such as on-site installation, commissioning training and remote operation and maintenance, solving customers' worries.
In terms of overseas expansion mode, domestic furnace transformers are upgrading from single product export to an integrated solution of "equipment + process + service". Many enterprises combine domestic engineering experience in EAF steelmaking to provide overseas customers with complete solutions of "furnace transformer + electric arc furnace + smelting process", driving the simultaneous export of supporting equipment and technical services. Since 2026, domestic enterprises have successively won metallurgical turnkey projects in Southeast Asia, the Middle East, Africa and other regions. As the core power supply equipment, furnace transformers are exported in batches along with the entire production line, with continuously improving global market recognition.
5. Industry Outlook: Long Prosperity Cycle Established, Broad Space for Global Cooperation
Overall, against the backdrop of global low-carbon transformation of the steel industry and capacity upgrading of the metallurgical industry, the furnace transformer industry is at the starting point of a long prosperity cycle. In the short term, with the continuous expansion of domestic EAF steel capacity, accelerated energy efficiency transformation of stock equipment, and the accelerated industrialization process of countries along the Belt and Road, the industry will maintain steady growth. In the medium and long term, with the development of hydrogen metallurgy, near-zero carbon smelting and smart factory technologies, furnace transformers will upgrade toward higher power, higher energy efficiency and higher intelligence, and application scenarios will continue to expand from traditional metallurgy to new energy materials, solid waste treatment and other fields.
For the global market, China's mature furnace transformer manufacturing capacity, rich engineering experience and cost-effective solutions can provide strong support for the low-carbon transformation and capacity upgrading of the metallurgical industry in various countries. In the future, there will be expanding space for Sino-foreign industrial cooperation in fields such as UHP EAF supporting facilities, energy efficiency transformation of old equipment, and customized special metallurgical equipment. China's furnace transformers will also play a more important role in the global metallurgical equipment market.