I. Overview of the Current Development of China's Wire and Cable Industry
As one of the largest supporting industries in the national economy, wires and cables are the foundation of various industries. Their products are widely used in electric power, construction, civil, communications, ships, military, aviation, petrochemical and other fields. Wires and cables can be divided into power cables, electrical equipment cables, winding cables, bare cables, communication cables and cables and cable accessories according to their uses. According to the proportion of market segments in China's wire and cable industry in 2017, power cables occupy the largest part of wire and cable business, accounting for 35.7%, followed by electrical equipment. Cables and windings account for 20% and 15.7% respectively.
In recent years, China's wire and cable industry has maintained a relatively rapid development momentum. As one of the most important supporting industries of the national economy, the wire and cable industry has a broad market in China. According to the situation in recent years, the sales revenue of China's wire and cable industry shows an overall upward trend, including sales revenue innovation in 2016 as high as 1392.4 billion yuan, in 2017, sales revenue of wire and cable declined slightly, to 135.13 billion yuan. With the increasing investment in infrastructure and the further implementation of the development of new energy, military, marine engineering, rail transit, UHV and smart grid, the market demand for wires and cables is increasing, especially in the field of high-end equipment cables. In the future, the sales revenue of China's wire and cable industry will continue to increase.
II. Global Development of Power Cable Industry
As the largest part of cable business, power cable industry has developed rapidly in recent years. From the global market perspective, the market size of power cable industry has increased year by year from 2012 to 2017. Although the growth rate of market size has declined since 2015, the overall growth trend remains unchanged. The global market size of power cable industry in 2017 is 207.3 billion US dollars, an increase of 7.7 billion compared with that in 2017. .9%.
According to the distribution of global power cable industry market structure in 2017, Asia accounted for 39% of the total, followed by Europe and America, accounting for 27% and 25% respectively, while other regions accounted for only 9%. With the acceleration of economic development in Asia and other emerging countries in recent years, global power cable production has gradually shifted to Asia. China has also taken this opportunity to promote the rapid development of the domestic power cable market.
III. Analysis of China's Power Cable Industry Chain
As an important branch of wire and cable industry, the structure of power cable industry chain is basically the same as that of wire and cable industry chain. From the industrial chain structure chart of China's wire and cable industry, the upstream of wire and cable industry mainly includes copper, aluminium, rubber, insulating plastics and other accessories, while the downstream industry of wire and cable industry covers a wide range, including power, power generation and communication. Railway, petrochemical, mining, shipping and other important areas of national economy, whose demand is greatly affected by macroeconomic conditions, belongs to pro-cyclical industries.
The wire and cable industry is a typical industry of "heavy material, light industry". Among the raw materials, copper and aluminium are the most important basic materials, accounting for more than 70% of the cost of wire and cable. From the output of copper in China in 2011-2018, the output of copper in 2011-2016 is increasing year by year. The output of copper in 2016 is 20.96 million tons. However, the output of copper has declined in recent years. The output of copper in 2018 has declined to 17.16 million tons. The price of copper has fluctuated, and the price fluctuation of raw materials will also affect the downstream power cable market.
IV. Production Situation of Power Cable Industry in China
From the production situation of power cable in China from 2011 to 2018, the output of power cable shows a rapid growth trend from 2011 to 2014, reaching a maximum output of 56.778 million kilometers in 2016. Since then, the output of power cable has begun to show a downward trend, mainly due to the fluctuation of upstream raw material prices, which has a more obvious impact on the gross profit rate of the industry. In 2017, the output of power cable has dropped to 49.77 million kilometers. 336,000 kilometers. In 2018, China's output of wires and cables was 45.320.07 million kilometers.
Source: National Bureau of Statistics, Huajing Institute of Industry
Although China is a big cable manufacturing country, its industry concentration is insufficient, its industry is large but not strong, and it is difficult to fully participate in global competition. Few enterprises are involved in high-value-added products in the industrial chain, such as aerospace, submarines, nuclear power, military industry, electronics, automotive wiring harness, high-voltage cable accessories, ultra-clean high-voltage cable materials and other high-end products and raw materials mainly rely on imports. Due to the lack of high-end R&D innovation capability, the domestic wire and cable products are highly homogeneous, and low price has become the main means of competition in the market. There are serious overcapacity in some areas of low-end products.