China Grid Tech: Power Transformer Export Tracker: May China transformer total exports picked up to 72% yoy, with exports to US at

Research evidence excerpt

China Grid Tech: Power Transformer Export Tracker: May China transformer total exports picked up to 72% yoy, with exports to US at

Goldman Sachs China Grid Tech

Exhibit 4: Export transformer to the US market has seen a Exhibit 5: Transformer in the 220-330MVA category saw

relatively volatile ASP in 10-220MVA due to volatile mix March-May rolling average pricing -29% yoy

change...

Transformer (10-220MVA) export to US market avg ASP, Transformer (220-330MVA) export to US market avg

(Rmb mn/unit) 3-month rolling (Rmb mn/unit) ASP, 3-month rolling

14.0 30.0

12.0 25.0

10.0 20.0

8.0 15.0

6.0 10.0

4.0

5.0

2.0

0.0

Source: China Customs, Data compiled by Goldman Sachs Global Investment Source: China Customs, Data compiled by Goldman Sachs Global Investment

Research Research

Exhibit 6: US PPI for the power and specialty transformer Exhibit 7: US power and specialty transformers’ PPI rose

price remained stable at a high level (3.9% yoy in May) earlier than other product categories, while switchgear

pricing has caught up in recent months (+12% yoy in May)

US PPI for Electric Power and Specialty Transformer vs CPI US PPI for Electric Power and Specialty Transformer vs

(Jan 2018 indexed to 100) other categories (Jan 2018 indexed to 100)

US PPI for electrical equipment and specialty power transformer US CPI US PPI for electrical equipment and specialty power transformer

US PPI for switchgear and switchboard apparatus manufacturing

US PPI for electrical equipment manufacturing

250 US PPI for turbine and turbine generator set units manufacturing

100 100

50 50

Source: FRED, Data compiled by Goldman Sachs Global Investment Research Source: FRED, Data compiled by Goldman Sachs Global Investment Research

Exhibit 8: Key raw materials for transformer, GOES, saw

prices inch down