AC transmission: Correlation
Prices it moves with, and why
AC transmission costs come from transformers, towers, conductors and substations, bought through long utility tenders. Prices follow copper, aluminium and electrical steel, plus factory capacity, which has been stretched by grid expansion and new demand.
Proxy US PPI: power and distribution transformers index (BLS base period =100) · monthly, Jan 2006 to Jul 2026There is no free public price for AC transmission itself, so this tab uses the closest public series as a stand-in. Read the numbers as an indication, not as the price of this exact item.
What its price moves with
Selected linkAC transmission and Transformers and power electronics
Monthly changes 0.91 strong correlation 12-month changes 0.98 strong correlation Last 5 years 0.94 monthly changes Lead or lag none No clear lead or lag Price function, Jan 2006 to Jul 2026 AC transmission ≈ 0.655 × (Transformers and power electronics)1.03 R² 0.99 On this fit, a 10% higher transformers and power electronics price goes with a 10.3% higher AC transmission price over the long run. Units: index (BLS base period =100) and index.Chart: AC transmission and Transformers and power electronics prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: AC transmission price against Transformers and power electronics price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Both tiles use US transformer price indices that cover nearly the same products, so they move almost as one: monthly changes correlate at 0.91 and yearly changes at 0.98. Read this as one equipment market, not two independent prices.
strong co-movement month to month · 247 months Show chartsTransformer cores use grain-oriented electrical steel and lines hang on steel towers. The transformer index tracks the steel mill index weakly month to month, at 0.34, and moderately year to year, at 0.56, since steel is one cost among copper, labour and factory margins.
weak co-movement month to month · 247 months Show chartsTransformer windings are mostly copper. Copper's swings pass into transformer prices slowly through tenders and price adjustment clauses, so the link is weak, at 0.22 for monthly moves and only 0.31 for yearly moves, with copper leading by about one month.
weak co-movement month to month · 247 months Show chartsOverhead lines use aluminium conductors with steel cores, and some transformers use aluminium windings. Aluminium shows little monthly link to the transformer index, at 0.17, and a moderate yearly one, at 0.42, since line conductors are not part of this equipment index.
little or none co-movement month to month · 247 months Show chartsUnderground and submarine cables are bought for the same grid projects and share copper, aluminium and insulation inputs. The two indices correlate at 0.34 for monthly moves and 0.72 for yearly moves, as grid spending cycles push both together.
weak co-movement month to month · 247 months Show chartsDry-type transformers, bushings and insulators use cast epoxy resin. The resin is a small cost share, so monthly changes show little link, at 0.15, though yearly moves correlate at 0.72 as both follow industrial inflation.
little or none co-movement month to month · 247 months Show chartsHow to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.