Abstract: With the continuous expansion of the scale of China's power industry, data communications, and urban rail transit industries in 2013, China’s wire and cable market capacity will maintain a significant growth rate of 8%-9% in the next five years. But if you can't break the excessive reliance on copper, then it may be even more mixed for China's wire and cable industry. As the wire and cable industry of the "blood vessels" and "nerves" of the national economy, 2013 is definitely a "color year."

During the “Twelfth Five-Year Plan” period, the acceleration of China’s railway construction will bring huge demand for locomotive cables, communications and signal cables. In 2013, with the continuous expansion of China's power industry, data communications, and urban rail transit industries, the demand for wire and cable will also grow rapidly, driving the development of China's wire and cable industry.

In the next five years, with the implementation of projects such as the West-to-East power transmission and power grid reconstruction and the gradual progress of urbanization, China's wire and cable market capacity will maintain a considerable growth rate of 8%-9%, but if it cannot be broken, Excessive reliance on copper cannot go beyond the “big but not strong” circle, so perhaps China’s wire and cable industry should be even more mixed.

Big but not strong circles

With the rapid growth of the output value of China's wire and cable industry, China has become a veritable cable country. As early as 2011, China's total output value of wire and cable has surpassed that of the United States, ranking first in the world.

However, despite the overall market for the cable industry, there are not many cable companies that can support such a large market. Except for a few large companies, domestic cable companies are almost always following the route of low quality brands. This makes the entire cable market into a messy situation.

Zhang Wencai, chief consultant of the China Architectural Design and Research Institute, told reporters at the 2013 US General Cable (China) Forum: “With the rapid development of China’s wire and cable market, the overall level of the industry has been greatly improved. However, it has not yet emerged. There is a big gap between the big and not strong circles and world-class companies."

As we all know, many problems in China's wire and cable industry, such as very serious redundant construction, overcapacity, large number of companies, small scale, weak technological innovation, and outstanding product structural conflicts, are already constraining the development of China's wire and cable. It is reported that at present, China's wire and cable industry average investment in R & D funds is less than 1% of sales, domestic cable companies more than 90% of production capacity is concentrated in low-end products, technology and product upgrades are far behind the pace of the market.

In addition, the high price of copper materials in recent years has caused the majority of wire and cable manufacturers to suffer. With the increase in production costs, the meager profits have made some wire and cable manufacturers unprofitable. As China is not a country with a large copper resource, on the contrary, in China, the lack of copper resources is an unavoidable issue. As a result, copper prices have remained high.

Aluminum alloy or wire and cable industry new favorite

China's copper core cable is well known by the public and it also accounts for most of the cable market. The current copper core cable has the characteristics of high strength and large current-carrying capacity, which is widely recognized in the industry. However, due to the inherent scarcity of copper resources in China, the contradiction between supply and demand in the market is prominent, and copper-core cable installation and installation are difficult and installation costs are high. Disadvantages such as easy-to-theft, easy-to-age, etc., people's voices for replacing copper-core cables are also rising.

Among them, the "aluminum substitute for copper" is the loudest voice. “As a trend, the proportion of aluminum conductors for insulated cables will continue to increase worldwide, including China.” Chen Kun, director of the National Standardization Technical Committee of Wire and Cable, presented to reporters at the 2013 U.S. General Cable (China) Forum For various reasons: First, the limitation of copper resources; secondly, when the copper price is running at a high level and the copper-aluminum price difference is large, the aluminum conductor insulated cable has obvious price advantages; again, the conductor connection of the aluminum conductor cable is effectively solved and the operation is reliable; finally, The advantages of aluminum conductor cables in obtaining environmental factors and potential impacts (LCAs) from raw materials, production, use, and final disposal.

At present, Western Europe, Northern Europe, the United States, Canada, Japan and other countries have been widely adopted. Almost 80% of the transmission lines in the United States and France use aluminum alloy wires, and Japan has reached more than 50%. The use of Southeast Asian countries has increased rapidly year by year. The current application in China is less than 1%.

“Aluminum can achieve all the properties of copper and even have advantages in some aspects.” Tan Bingwen, President of U.S. General Cable (China), pointed out to reporters: “In North America, aluminum alloy cables account for about 40% of the entire industry. In China, we are From the beginning of 2000, although the percentage is very low, it is a unit figure, but the market is very large. China is the world's largest cable market, accounting for about 35% of the world, so this space is very large."

Lack of industry standards

The huge market space will inevitably attract many entrants. If rational competition will promote the development of the industry, irrational disorderly competition will cause industry confusion.

Economists once clearly pointed out in the 1990s that the Chinese economy is a “hot-spot economy”. The so-called hot-spotless economy is not without hotspots, but once hot spots appear, large amounts of investment flock and hot spots disappear.

Professionals familiar with the domestic cable industry know that since the reform and opening up, the domestic cable industry has witnessed the emergence of all-plastic local cables, optical fiber cables, electron accelerators for irradiation cables, CCV production lines for medium-voltage cross-linked cables, VCV production lines for high-voltage EHV cables, and rubber insulation. Cable and many other investment booms are exactly the same investment boom that once again caused the original excess industry to fall into the "abrupt deeper surplus."

“The investment boom in aluminum alloy conductor low-voltage cables is now taking shape. According to rough statistics, more than 100 companies in China have already invested in the project. This should cause the domestic cable industry and users to pay close attention. Irrational disorderly competition is caused by excessive investment. The inevitable result of a new round of overcapacity," said Chen Kun.

So why is there an irrational disorderly competition in the aluminum alloy cable market?

The reason is that China's aluminum alloy cable does not have corresponding industry standards or national standards, and there are no standards for design, procurement, use, and acceptance.

“Because the standard is not yet perfect, what is the aluminum alloy cable in China in the end there is not a clear industry standard, and even some people take pure aluminum when the aluminum alloy cable is sold.” Tan Bingwen pointed out that if you search for aluminum alloy cable in Baidu, you Many names can be found, and many companies claim to be doing aluminum alloy cables.

It is understood that most aluminum alloy cable manufacturers currently produce and sell according to GB/T12706-2008 "Extruded Insulated Power Cables and Accessories with Rated Voltage of 1kV to 35kV". There is no unified national industry standard. As a result, most manufacturers have to refer to EU directives, or apply the standards and requirements of large domestic companies, causing further market confusion, but also to the use and construction of the project has brought potential security risks.

However, at present, China has begun to formulate national standards and industry standards for aluminum alloy single wire and aluminum alloy power cables. “Now the cable industry has reached a stage where customers are not too knowledgeable in this regard to determine what is aluminum alloy cable, what is not aluminum alloy cable, and by virtue of foreign experience, we feel that the market is also good for customers, For enterprises, setting standards is the right direction of development,” said Tan Bingwen. Of course, the standard is only one, and more companies still need more efforts in this area.

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