What can you tell us about the current state of the wire and cable market?
The metallic wire and cable industry experienced a pronounced recovery last year, although recent developments have resulted in a weakening in global demand. The war in Ukraine has driven a marked downgrade across both Eastern and Western Europe, whilst renewed Covid-19 cases and lockdowns in China are hampering the country’s prospects for cable demand currently. Though there are certainly regional highlights to discuss, for example, CRU expects stimulus measures in the US will enable robust growth in cable demand this year.
Sparked by the war in Ukraine, an increase in the pace of diversification away from traditional fuel sources in the EU will provide significant support for power cable demand mid-term. CRU estimate upwards of 10 cable conductor tonnes are consumed per MW of installed offshore wind capacity, more than eight times that for natural gas plants. Whilst less intensive than offshore wind, increasingly ambitious targets for onshore wind and solar, not just in the EU, but globally, will also help support elevated growth in power cable demand throughout this decade and beyond.
And how has the outlook for the optical fibre and cable market shifted since the pandemic?
With regards to the optical fibre industry, the situation and outlook is far brighter. That is not to say the industry hasn’t faced its fair share of challenges over the last few years. Indeed, we have seen sharp contractions in demand as the Chinese market transitioned, elevated inventories and record low price levels, all set amongst the backdrop of a pandemic.
However, this year, the optical fibre industry is set for the fastest
growth in demand since 2017, spurred on by rising investment in fixed line
networks alongside ongoing 5G network construction. The best example of this is
in the US, where broadband centric stimulus measures, such as the RDOF and BEAD
program are supporting elevated demand and record cable deployment levels.
Prices for both fibre and cable have subsequently responded
and are now back at pre-pandemic levels following persistent gains since mid-2021, benefitting not only from robust demand, but also rising input costs. With the appetite for optical cable so strong currently, these increases are being fully passed onto customers.
Looking ahead, key growth markets such as data centres, edge and cloud computing alongside a shift to full stand-alone 5G commercial services are all acting to support healthy forecasts for optical fibre over the coming five years. In a similar vein, the rise in adoption and sales of EV’s, increasing renewable capacity installations and associated upgrades to grid infrastructure is supporting a more positive outlook for mid-term metallic wire and cable demand, especially within the power cable sector.
Which key factors are likely to continue to disrupt the market?
In terms of the potential obstacles the industry will have to overcome, labour, logistics and rising input costs are amongst some of the largest and hardest to face. With regards to optical fibre, labour remains a key barrier and is beginning to constrain deployments in the US which if left unaddressed could at to cap deployments mid-term. On the metallic side, the war in Ukraine has significantly disrupted supply chains and sparked record increases in metals prices, as well as causing wider concerns surrounding economic health within the region.
What should delegates expect from this year's CRU Wire and Cable Conference?
Holding the event in London this year, we aim to bring industry leaders from around the world together along with a wide range of CRU's experts from across the wire, fibre, copper, aluminium and economics teams for valuable discussions. The agenda will address some of the key themes impacting the industry, and provide a forum to explore the challenges and opportunities the wire and cable industry faces over the coming years as we recover from the recent disruptions and transition to a greener and more connected world.