Wire and Cable Materials Market

Wire and Cable Materials Market: Overview

• Wire and cable materials are primarily of two types: conductor material and insulation material. Conductors such as copper, aluminum, zinc, pure silver, and gold can conduct electricity. Insulating materials commonly used to cover copper wire, aluminum, and other electrical conductors are classified into two broad categories: Thermoplastic and Thermoset. The major difference between wires and cables is that a wire is a single conductor, while a cable is a group of conductors covered with an insulating material.
• Wire and cable materials include various types of insulation materials such as polyethylene, polyvinyl chloride, and polypropylene. Plastic in wire and cable serves as a jacketing and insulating material. It protects the underlying cable core against mechanical damage, moisture, and chemicals during installation and throughout the service life of the cable. It also protects people from accidental electrocution. Covering electrical wires in plastic ensures that the electrons flowing through the wires do not flow through the body when the wire is touched. These features of plastic insulated wires make them a lucrative option over alternate solutions.
• Other wire and cable materials include Polychloroprene, Ethylene Propylene Rubber, Fluorinated Ethylene Propylene, Polyvinylidene Fluoride (PVDF), Ethylene Tetrafluoroethylene, Polytetrafluoroethylene, nylon, and CPE (chlorinated polyethylene)
• Wire and cable materials is widely utilized in the production of coaxial cable/electronic wires, fiber optic cables, low voltage energy power cables, signal & control cables, and telecom & data cables

Key Growth Drivers of Wire and Cable Materials Market

• Demand for electricity is estimated to increase, owing to rising household income, electrification of transport, heat, and demand for digital connected devices and air conditioning. According to the International Energy Agency, global electricity demand rose by 4% in 2018 as compared to that in 2010. Renewable and nuclear power primarily contributed to rise in the demand for electricity. Global electricity demand in 2018 increased by 4%, or 900 TWh. Half of the rise in demand for energy, globally, was from the power sector in response to higher electricity consumption. According to Sustainable Development Goal, the global electrification rate rose from 83% in 2010 to 89% in 2017. Rise in demand for electricity from the residential, industrial, and commercial sectors fuels the wire and cable materials market.
• Wires and cables play a pivotal role in residential, commercial, and industrial establishments, as these are used to safely deliver power, data, and voice communication to electrical devices. Wire and cable materials offer safe, flexible, and cost-efficient options for power distribution. Rise in global population and increase in disposable income of consumers are key factors boosting the demand for residential homes and various other construction projects. This is estimated to propel the demand for wire and cable materials over the next few years.
• The global automobile industry witnessed a temporary slowdown in demand in 2019, owing to increasing prices of petrol and diesel. However, governments of France, Norway, and the Netherlands are providing subsidies to boost the sales of electric vehicles, which, in turn, is estimated to further increase the demand for automotive wires and cables in the long-term. Under the Paris Agreement, all countries are joining hands to reduce carbon emission and keep the increase in average global temperature to below 2°C. In line with this objective, France and the Netherlands aim to ban petrol and diesel vehicles by 2025. Majority of countries under this agreement is shifting toward the production of electric vehicles. This is anticipated to boost the demand for electrical wire and cable materials for the automotive industry in the near future.

Key Challenges for Wire and Cable Materials Market

• Copper, aluminum, and polymer resins for insulation are key raw materials that are used in the manufacture of wire and cable materials. However, most raw materials utilized for wire and cable insulation such as polyethylene, polypropylene, polyvinyl chloride etc. are made from petrochemical derivatives. Extensive usage of petrochemicals, such as vinyl chloride monomers, in the production of PVC wire and cables affects their overall market price. Depletion of crude oil sources is a key factor leading to price volatility in the global market.
• Prices of copper have also increased sharply from US$ 6,147.6 per ton in 2019 to US$ 7,846.2 per ton in 2020, owing to an imbalance in demand-supply created by the COVID-19 pandemic
• These factors have caused substantial volatility in prices of primary petrochemical derivatives over the past few years. This scenario is projected to hinder supply and demand of raw materials required in the production of wire and cable materials. Hence, volatility in raw materials prices is likely to hamper the wire and cable materials market during the forecast period.

Lucrative Opportunities for Players in Wire and Cable Materials Market

• Key players such as Celanese Corporation, BASF SE, and 3M, Dow can focus on expanding their global footprint through strategic capital allocation and increase in production capacity
• Companies need to focus on product improvements in order to create new interest in existing products. This can help draw customers and improve the perception of the quality of products.

Domination of Asia Pacific in Wire and Cable Materials Market

• In terms of volume, Asia Pacific holds a major share of the global wire and cable materials market in 2019. Energy demand in Asia Pacific is projected to rise at a rapid pace during the forecast period with simultaneous increase in energy usage in sectors such as industry, transport, and household, and in newly electrified rural areas in countries of the region. The construction sector in China is expanding rapidly, due to rise in population, growth in industrialization, and increase in foreign investments. China accounts for almost 25% of the global primary energy consumption. Moreover, demand for housing among the middle-income group in India is expected to increase over the next few years. The Government of India is taking active steps to bridge the gap between demand and supply. As per an estimate, every year, 2 million new housing units are built in urban areas, while 4.5 million units are built in rural areas of the country. These factors are likely to drive the wire and cable materials market in Asia Pacific during the forecast period.
• The wire & cable industry in Europe is expected to expand significantly in the near future, owing to initiatives such as Digital Agendas for Europe 2025. These measures would help people as well as businesses in Europe reap benefits of digitization. Thus, growing use of wires and cables in the IT & telecommunication sector in the region is anticipated to drive the wire and cable materials market in Europe in the near future. However, the market share held by Europe is estimated to decline due to the rapid expansion of the market in Asia Pacific.

• North America witnessed rapid increase in data consumption, which has resulted in investments by companies such as AT&T and Verizon in fiber optic network in the region. This factor is boosting the demand for wire and cable materials in the region. Increasing access to electricity in Latin America and Middle East & Africa is fueling the wire and cable materials market in these regions. Power cables are used for transmission of electricity.

Leading Players in Wire and Cable Materials Market

• Key players operating in the global wire and cable materials market include Celanese Corporation, BASF SE, 3M, Dow and Alphagary
• In January, 2019, Celanese Corporation completed the acquisition of Next Polymers Ltd., which is engaged in the manufacture of engineering thermoplastic compounds. The acquisition is expected to consolidate the company’s position in the market in India.
• In 2019, BASF SE announced its plan to produce wire and cable materials such as thermoplastic polyurethanes with an additional capacity of 60,000 metric tons per year at its new facility situated at Zhanjiang, China. This new plant is expected to push production capacity in Asia Pacific of these products to 290,000 metric tons per year.