# Transformers and power electronics: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/energy/e_power_electronics/correlation/ The index covers power and distribution transformers. Prices follow grain-oriented electrical steel, copper windings and insulating oil, but most of all grid investment: utility, renewable and data centre demand has stretched factories and lengthened order books. Price index **US PPI: power, distribution and specialty transformers** index · monthly, Jan 2006 to Sep 2026 #### What its price moves with Selected link ##### Transformers and power electronics and Steel Monthly changes 0.35 weak correlation 12-month changes 0.59 moderate correlation Last 5 years 0.12 monthly changes Lead or lag none No clear lead or lag Price function, Jan 2006 to Sep 2026 Transformers and power electronics ≈ 2.59 × (Steel)^0.86 R² 0.74 On this fit, a 10% higher steel price goes with a 8.5% higher transformers and power electronics price over the long run. Units: index and index, BLS base period. Chart: Transformers and power electronics and Steel 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: Transformers and power electronics price against Steel 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. Commodity [St Steel](https://www.materialinsights.org/commodities/steel/)Core material 0.35 Transformer cores are made of grain-oriented electrical steel, a scarce speciality grade. Yearly moves correlate at 0.59 with the general steel index, a moderate link, weaker than the true cost link because the general index does not track electrical steel. weak co-movement month to month · 249 months Show charts Commodity [Cu Copper](https://www.materialinsights.org/commodities/copper/)Windings 0.14 Copper windings are a major material cost in transformers. Yearly moves correlate at only 0.27, a weak link because orders are priced well before delivery, often with metal adjustment clauses, so copper swings reach the index slowly. little or none co-movement month to month · 249 months Show charts Commodity [Al Aluminium](https://www.materialinsights.org/commodities/aluminum/)Windings 0.10 Aluminium replaces copper in many distribution transformer windings when the price gap widens, as it is cheaper but bulkier. Yearly moves correlate at 0.41, while monthly moves correlate at only 0.10, showing a slow and partial pass-through. little or none co-movement month to month · 249 months Show charts Energy [HVAC AC transmission](https://www.materialinsights.org/energy/e_hvac/)Same products 0.91 The transmission proxy is a narrower transformer index covering almost the same products. Monthly moves correlate at 0.91 and yearly at 0.98, so the two series are close to duplicates rather than separate markets. strong co-movement month to month · 247 months Show charts Energy [Cab Underground, submarine and superconducting cables](https://www.materialinsights.org/energy/e_cables/)Shared grid demand 0.36 Cables and transformers are bought together for grid expansion and renewable connections. Monthly moves correlate at 0.36 and yearly at 0.74, a common driver from utility spending and from shared copper and aluminium costs. weak co-movement month to month · 249 months Show charts Chemical [pSi Polysilicon](https://www.materialinsights.org/chemicals/polysilicon/)Semiconductor input Inverters and converters rely on power semiconductors made on silicon wafers, which start as polysilicon. Newer devices use silicon carbide or gallium nitride. Polysilicon has no public price series here, and chip costs are a small part of transformer-heavy equipment. Not enough overlapping price history to measure. How 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. ## Other sections - [Summary](https://www.materialinsights.org/energy/e_power_electronics/index.md) - [Overview](https://www.materialinsights.org/energy/e_power_electronics/overview/index.md) - [Science and limits](https://www.materialinsights.org/energy/e_power_electronics/science/index.md) - [Value chain](https://www.materialinsights.org/energy/e_power_electronics/valuechain/index.md) - [Unit economics](https://www.materialinsights.org/energy/e_power_electronics/economics/index.md) - [Engineering methods](https://www.materialinsights.org/energy/e_power_electronics/methods/index.md) - [Equipment and suppliers](https://www.materialinsights.org/energy/e_power_electronics/equipment/index.md) - [Relationships](https://www.materialinsights.org/energy/e_power_electronics/links/index.md)