Market evolution: Steam turbines (CN 8406) — 2015–2025

Introduction

This report examines the evolution of the European Union's trade in steam and other vapour turbines, including parts (Customs Code 8406), between 2015 and 2025. Over this decade, the EU has remained a significant net exporter in this capital-intensive sector, but the data reveals a profound restructuring of its trade dynamics. The period is characterized by a marked decline in traded volumes, a sharp increase in unit values, a geographical reorientation of partners, and a strategic shift toward higher-value production, all occurring within a context of increasing market concentration and periodic supply shocks.

A Decade of Declining Volumes and Rising Unit Values

The most striking trend in EU trade for steam turbines over the 2015-2025 period is a divergence between the value and volume of trade. While the overall value of trade has remained substantial, the physical quantity of goods crossing the EU's borders has fallen dramatically, indicating a fundamental shift in the nature of transactions.

Export Performance: Fewer, More Expensive Shipments

EU exports of steam turbines have experienced a significant contraction in volume but a relative resilience in value, driven by substantially higher unit prices.

This data, accessible via the General Overview, shows that export volumes fell by 40.5% to their lowest point in the period. However, the export value fell by only 16.4% because the average price per tonne increased by over 40%. This suggests EU manufacturers are exporting fewer complete turbine systems but are commanding much higher prices, likely due to a focus on more advanced, efficient, or customized technology.

Import Trends: Increasing Volume at Lower Costs

In contrast to exports, EU imports have followed an opposite path: a surge in physical volume coupled with a decline in total value, leading to a collapse in import prices.

As detailed in the General Overview, the EU imported 50.1% more turbines by weight in 2025 than in 2015. However, the total bill for these imports decreased slightly, meaning the price per tonne dropped by 37.2%. This points to the EU sourcing more standard, lower-cost turbine units, possibly for maintenance, replacement parts, or smaller-scale applications, from global suppliers.

The Resulting Trade Balance

The EU has maintained a consistent trade surplus throughout the period, but its size has narrowed. The surplus shrank from just over EUR 1 billion in 2015 to approximately EUR 813 million in 2025, a decline of 18.9%. This contraction is the direct result of falling export values and stable import values, reflecting the underlying shift in trade composition.

A Shifting Geographical Landscape and Periodic Volatility

The EU's network of trading partners for steam turbines has undergone significant restructuring, with notable gains from some regions and losses from others. This realignment has been punctuated by episodes of high volatility and identified supply shocks.

Export Markets: The Rise of the United States, The Decline of India

The EU's top export destinations show a clear shift over the decade. The United States has solidified its position as the premier market, while several traditional partners have seen reduced demand.

Source: Top partners by value (exports). The data indicates a strong pivot towards North America and the UK, possibly linked to energy transition investments or grid modernization projects. The decline in exports to China and India suggests growing domestic competition in those markets.

Import Sources: The Ascent of China and the UK

The origin of EU imports has changed even more dramatically. China has emerged as the dominant supplier, while imports from traditional partners like Japan and Switzerland have collapsed.

Source: Top partners by value (imports). China's eightfold increase in export value to the EU underscores its growing capability in manufacturing and exporting industrial machinery, including turbines. The steep declines from Japan and Switzerland may reflect a loss of competitiveness in standard segments or a strategic retreat by those suppliers.

Volatility and Notable Supply Shocks

Trade with certain partners has been highly volatile. For imports, flows from Mexico (Coefficient of Variation: 2.27) and Ukraine (CV: 1.11) were the most unstable. For exports, shipments to Egypt (CV: 1.77) and Saudi Arabia (CV: 1.14) showed high variability. The analysis also detected several significant price shocks, notably for exports to Thailand, the Philippines, and Egypt between 2020 and 2021, as detailed in the Volatility & Shocks section. These shocks likely reflect large, one-off project deliveries or disruptions in supply chains.

Structural Shifts: Specialised Production, Concentration, and Strategic Autonomy

Beyond the headline trade figures, deeper structural trends reveal an industry focusing on higher-value output, becoming more concentrated, and improving the EU's strategic position.

EU Production: A Move to High-Value, Low-Volume Manufacturing

While EU trade volumes fell, production data shows a remarkable transformation. EU production quantity in kilowatts (kW) fell by 53.6%, but the value of that production surged by 190.2%.

Source: Production volumes. This indicates a strategic pivot towards producing far fewer, but much more valuable, complex, and likely more technologically advanced turbine systems. The EU appears to be ceding the high-volume, standard-commodity market to competitors and focusing on bespoke, high-margin engineering.

Increasing Market Concentration

The market structure has become more concentrated over the decade. The Herfindahl-Hirschman Index (HHI), a measure of market concentration, increased for both exports and imports.

• Export HHI (by value): Rose from 529 to 867 (+63.7%).
• Import HHI (by value): Rose from 1,466 to 1,674 (+14.2%).

Source: Concentration (HHI). Rising concentration suggests trade is being dominated by fewer, larger partners. This could increase efficiency but also raises concerns about dependency and reduced competition.

Specialisation Within the EU

The EU's internal specialisation in steam turbine production is led by Hungary (RSCA: 0.65), Italy (0.47), and Czechia (0.45), meaning these countries have a strong comparative advantage in exporting these products relative to their overall trade. Conversely, several member states have virtually no domestic production in this sector.

Enhanced Strategic Autonomy

The EU's position as a net exporter improved over the period. The net import reliance metric (a negative value indicates a net exporter) improved from -61.7% in 2015 to -40.7% in 2025, meaning the EU's trade surplus relative to its domestic consumption grew stronger. This is corroborated by a falling trade intensity and export propensity, indicating the sector became less dependent on international trade flows overall.

Source: Net import reliance. However, this improved autonomy is nuanced. While the EU became a stronger net exporter overall, it simultaneously increased its import volume of standard turbines, likely from China, creating a new dependency for specific product segments.

Conclusion

Between 2015 and 2025, the EU's steam turbine market underwent a significant reorientation. The region moved decisively away from being a high-volume exporter, instead specializing in high-value, technologically complex systems. This shift is evidenced by falling physical trade volumes but sharply rising prices and a massive increase in the value of domestic production. Concurrently, the geographical map of trade was redrawn, with the United States becoming a paramount export market and China emerging as a dominant source of imports, displacing traditional partners like Japan and Switzerland. This transformation has enhanced the EU's strategic autonomy as a net exporter but has also introduced new dependencies and increased market concentration. The period was characterized by pronounced volatility and notable supply shocks, underscoring the sector's susceptibility to large project-based transactions and geopolitical disruptions. Overall, the data depicts an industry in structural transition, focusing on high-end engineering while outsourcing standard production, a strategy with profound implications for the EU's industrial resilience and competitiveness.