Material Costs and Their Fluctuations in 2025.
- Grupo Edmar
- Oct 8
- 5 min read
October 8, 2025 - Material Costs and Their Fluctuations in 225.
Material Costs and Their Fluctuations in 2025.
The cost of materials has always been a sensitive issue within the electrical sector, but in 2025, fluctuations are more noticeable than ever . In the case of electrical transformers, which involve metallic materials, oils, insulation, and highly specialized components, any fluctuation in international prices can alter budgets and delivery times.
This year, manufacturers are facing a highly volatile environment due to global economic factors, trade tensions, technological changes, and environmental policies . In this article, we analyze which materials have had the greatest impact on costs, the reasons behind their fluctuations, and how companies like Grupo Edmar have adapted to maintain the quality and competitiveness of their products.
Key Materials in Transformer Manufacturing.
Electrical transformers are composed of a combination of metals, insulation, dielectric fluids, and metal structures that ensure their safe and efficient operation. However, not all materials contribute equally to the final cost .
Among the most decisive are:
Copper: This is the soul of the transformer. It's used for the windings due to its excellent conductivity. Its price is usually the most competitive on the market.
Silicon steel (magnetic plates): It is used for the core and has a great impact on the performance and efficiency of the equipment.
Dielectric oil: It serves a dual purpose: providing electrical insulation and heat dissipation. Its quality directly influences the transformer's lifespan.
Papers and insulating materials: They protect the windings and guarantee the internal safety of the equipment.
Metal structures and hardware: These provide support and protection. In large equipment, they represent a considerable portion of the total weight.
Interesting fact: In some power transformers, copper can represent up to 40% of the total cost of materials , so any increase in its price has an immediate impact on the value of the final product.
External Factors Influencing Price Fluctuations.
Cost fluctuations don't happen by chance. In 2025, several external factors have a direct impact:
Global metal demand: The energy transition has increased the need for copper, aluminum, and steel in sectors such as renewable energy, electric vehicles, and electrical infrastructure.
Geopolitical conflicts: Disputes between metal-producing countries, such as China, Russia, and Chile, affect global supply and prices.
Inflation and interest rates: International monetary adjustments make logistics, transportation, and storage operations more expensive.
Cost of maritime transport: Container prices remain high after the disruptions of previous years, affecting the entire industrial sector.
Environmental factors: Stricter emissions policies and responsible mining have limited the production of certain materials, making them more expensive to obtain.
Exchange rate: In Mexico, the variation of the peso against the dollar or euro directly impacts imported materials.
These combined factors have forced companies to be more strategic in their purchasing and inventory , especially in industries that rely on high-purity metals.
Price behavior during 2025.
During the first half of 2025, electrical raw material prices showed a mixed trend :
Copper: Maintained a sustained upward trend. Demand from the energy and automotive sectors positions it as a critical resource. On average, its price increased 10% to 15% compared to the previous year.
Silicon steel: Experienced moderate increases of 5%, driven by shortages of grain-oriented steel and higher industrial energy costs.
Dielectric oils: Up slightly due to higher oil costs and specialty chemical additives.
Resins and insulators: Prices remained variable depending on their origin and formulation; high-temperature materials were the most affected.
Example: If the cost of copper per ton increases from $9,500 to $10,700, the impact can represent an increase of up to 8% in the total cost of a medium voltage transformer .
This forces manufacturers to adjust quotes more frequently, communicating changes transparently to their customers.
Strategies to Mitigate the Impact of Fluctuations.
Faced with instability, manufacturers are implementing various measures to protect their margins and ensure timely deliveries. Some of the most effective strategies include:
Long-term negotiations: Agreeing on annual or semi-annual contracts with trusted suppliers allows for price stabilization and better planning.
Financial Hedging: Large companies can use hedging tools to lock in future copper or steel prices.
Design Optimization: Engineers constantly review the transformer's internal structure to reduce material waste without compromising performance.
Use of alternative materials: In some designs, copper is replaced by aluminum or more cost-stable dielectric vegetable oils are used.
Inventory planning: Maintaining strategic stocks of critical materials helps cushion price spikes or delivery delays.
Collaboration with clients: Some manufacturers, such as Grupo Edmar, establish agreements that allow for gradual price adjustments, avoiding drastic impacts for both parties.
Together, these practices allow for sustainable operations and competitive pricing even during periods of high volatility.
Risks of Not Managing Fluctuations Correctly.
Ignoring market fluctuations can have significant consequences:
Loss of profitability: If the price of materials rises without timely adjustments, margins are rapidly reduced.
Production delays: Lack of inputs can delay deliveries and affect contractual commitments.
Decreased quality: Replacing materials with cheaper options can compromise the transformer's lifespan.
Financial risks: Poor planning can lead to cost overruns that affect the company's stability.
Customer distrust: Sudden price adjustments or non-compliance can deteriorate the business relationship.
In the electrical industry, anticipation is key . Cost management is not just an accounting task, but a comprehensive strategy that defines a company's reputation and strength.
How Grupo Edmar deals with cost changes.
At Grupo Edmar , we understand that stable material prices are essential for our customers. Therefore, we implement a policy based on three pillars:
Constant planning and monitoring: We closely monitor international indicators for copper, steel, and oil to anticipate any changes.
Supplier diversification: We have national and international partners that guarantee the availability of materials even in difficult circumstances.
Process optimization: Our engineering is geared toward making the most of every kilogram of material, reducing waste and improving the energy efficiency of our equipment.
In addition, we maintain open communication with our customers to inform them of any price or delivery changes in advance. This allows us to offer reliable, high-quality transformers with an excellent cost-effective ratio.
Recommendations for buyers and electric companies.
If you're involved in purchasing transformers, electrical materials, or managing energy projects, consider these suggestions:
Request updated quotes: Prices change monthly; be sure to check the effective dates.
Plan your purchases: Ordering in advance allows you to take advantage of lower prices or volume promotions.
Evaluate quality over price: Sometimes, slightly more expensive equipment offers greater durability and lower maintenance costs.
Consult with specialists: Manufacturers like Grupo Edmar can advise you on the best time to purchase or schedule your transformer.
Stay informed: Reviewing copper or steel trends helps you make strategic purchasing decisions.
These practices can make the difference between a profitable project and one that goes over budget.
For transformer manufacturers, this represents an opportunity to strengthen internal efficiency, improve their relationships with suppliers and optimize product design .
At Grupo Edmar, we will continue to focus on innovation, quality, and trust, supporting each client with sustainable and safe energy solutions.
