In recent years, the profit margin of traditional low-voltage cables has been declining, while high-end specialty cables, due to their high barriers to entry and substantial profits, have attracted more and more cable companies to attempt production. However, to date, the Chinese specialty cable market is largely dominated by foreign companies, primarily due to technological differences. This has resulted in Chinese cable manufacturers facing fierce competition in the low-to-mid-end market, with their profit margins constantly squeezed. Currently, the domestic production capacity and supply of some mid-to-high-end specialty cables are far from meeting actual demand, and the import growth rate of my country's specialty cables has exceeded 20% in recent years.
In fact, with the rapid development of the economy, the demand for special wires and cables with unique performance and special structure suitable for various special places is increasing day by day. Compared with ordinary wires and cables, special cables have the characteristics of high technical content, strict application conditions, small batch size and high added value. They are widely used in new energy power generation, electrified railways and urban rail transit, ships and offshore oil extraction, mineral development, high-rise buildings, important military facilities, etc.
Currently, there is a strong demand for environmentally friendly cables, special conductors, drag chain cables, and cables for modern transportation, making these the main specialty cable markets that cable manufacturers are vying to enter. But what are the development prospects for these four types of specialty cables?
Environmentally friendly cables
First of all, the research and development of environmentally friendly cables can be said to be the most talked-about topic today. The main reason is that different regions across the country have experienced varying degrees of "smog", which has brought the word "environmental protection" to the forefront.
Clearly, the emergence of smog has directly promoted the development of green cables. For example, in response to the much-discussed issue of smog pollution, Meng Qingqiang, a deputy to the National People's Congress and general manager of Chongqing Electric Power Company, believes that my country's ultra-high voltage (UHV) technology for transmitting electricity across regions and over long distances is already very mature. He argues that UHV lines should be vigorously constructed to transmit electricity from the Northwest and Southwest to the Northern regions, thereby changing the coal-dominated energy structure in the North and opening up new avenues for smog control.
Currently, the research and development of environmentally friendly cables to combat smog has become a global focus. This is not limited to cable manufacturers; even scientists are developing cable technologies or products capable of eliminating smog. For example, Dutch inventor Dan Rosegaard invented a technology that uses energized copper coils to create an electrostatic field, which adsorbs particulate matter in the air, achieving a localized smog-removing effect.
Besides addressing smog, the development of environmentally friendly cables for fire prevention has also been ongoing. Since 2013, major cities such as Beijing and Shanghai have explicitly prohibited the use of polyvinyl chloride (PVC) wires and cables in important buildings to avoid large amounts of smoke and chlorine gas in the event of a fire, which could cause more casualties. The use of halogen-free, low-smoke cross-linked polyolefin insulated wires and cables has become a local regulation in these areas, and with increasing environmental awareness, the application of such cables will gradually expand.
With the EU's RoHS directive, the research and large-scale adoption of eco-friendly wires and cables has become an international trend. Currently, the application of flame-retardant and fire-resistant cables has expanded to many fields both domestically and internationally, such as mining cables, general-purpose rubber-sheathed cables, elevator cables, and household appliance cables, all of which have varying degrees of flame-retardant requirements.
Special conductors
Specialized conductors can reduce power loss by 10%-20%, and the State Grid Corporation of China (hereinafter referred to as "SGCC") has been trying to promote them. SGCC issued an official document on this topic in 2012. However, in the domestic specialized conductor market, due to insufficient supply and a limited number of manufacturers, the growth of specialized conductors has been relatively modest (20%) in the past, failing to achieve significant volume growth. Specialized conductors account for only 2% of SGCC's conductor procurement. According to SGCC's plan, from 2013 to 2017, the Grid will invest 620 billion yuan to build 20 ultra-high voltage lines, which will drive accelerated growth in the company's specialized conductors, conductors, OPGW, and other products.
Currently, the production capacity of domestic special conductor manufacturers is relatively small. Taking aluminum alloy conductors as an example, there are only a few manufacturers, such as Zhongtian Technology, Qingdao Hanlan, Shanghai Zhongtian Aluminum Wire, Wuhan Cable Co., Ltd., and Hangzhou Zhongce Cable. Each company has an annual production capacity of only about 5,000-10,000 tons, and the supply period cannot meet the requirements of projects, which has forced many projects to switch to ordinary conductors or import them.
In 2012, my country's annual consumption of overhead conductors was approximately 1.2 million to 1.5 million tons, of which special conductors accounted for 5% to 10%. During the 12th Five-Year Plan period, transmission lines are expected to grow at a rate of 13% to 15%, with special conductors accounting for approximately 5% to 10% of overhead conductors.
Cables for modern transportation
To cope with the economic crisis and expand domestic demand, the Chinese government has invested heavily in infrastructure construction. High-speed railways, urban rail transit, modern automobiles, ships, and large aircraft are among the key projects for future development. The manufacture of these modern transportation vehicles requires a large amount of power, control, signal, and instrument cables, such as wiring for locomotives and rolling stock; shielded signal cables for locomotives and rolling stock; cables for computers and electrical instruments; DC power cables for urban rail transit; low-voltage wiring for automobiles; wiring for aircraft; and halogen-free, low-smoke, flame-retardant cables for ships.
The "2012-2016 Macroeconomic Investment Environment and Industry Trend Analysis Report for the Wire and Cable Industry" states that during the "12th Five-Year Plan" period, the accelerated construction of railways in my country will bring huge demand for locomotive cables, communication cables, and signal cables, with an estimated average annual demand of 160,000-200,000 kilometers and 70,000-100,000 kilometers respectively; urban rail transit will generate an annual demand of 25,000-30,000 kilometers for vehicle cables; and an annual demand of 15,000-20,000 kilometers for traffic signal cables. It is evident that the increase in railway operating mileage will drive strong demand for rail transit.
In 2013, the Ministry of Railways planned to invest 800 billion yuan in railway infrastructure, which would increase my country's railway mileage by 10,000 kilometers. According to standard calculation methods, traction power supply typically accounts for 7%-10% of the total cost of rail transit projects. This 800 billion yuan investment will create an 80 billion yuan power supply market. Therefore, the recovery of the modern transportation wire and cable industry is due to objective market demand.
Drag chain cable
With the development of industrial automation, cables are frequently overloaded during operation, far exceeding their load-bearing capacity. Production stoppages due to cable failures are common occurrences. In this critical situation, drag chain cables have emerged and are widely used. They are commonly found in automated production lines, industrial electronic systems, robots, fire protection systems, warehousing equipment, CNC equipment, cranes, and other automated equipment.
According to Wind Info, by the end of 2012, the national sales revenue of cranes reached 245.504 billion yuan, with an annual growth rate of 23.20%. Meanwhile, the robotics industry is also booming globally, as shown in Figure 1. In 2000, my country had only about 3,500 industrial robots, while by the end of 2010, the installed base of industrial robots in my country had reached 52,300 units. In the same year, China ranked third globally in annual industrial robot supply, with sales of 15,000 units, a year-on-year increase of 171%.
Currently, the large-scale production has led to a market situation where drag chain cables vary in quality, but the market for drag chain cables should not be ignored.
The four types of high-profit specialty cables have promising prospects, mainly due to favorable policies and practical needs. For example, environmental pollution such as smog has boosted demand for environmentally friendly cables and ultra-high voltage cables, while the continuous advancement of urbanization has significantly increased the demand for cables used in modern transportation. Finally, due to rising domestic labor costs and considerations for efficiency and management, the industrial robot industry is booming, leading to strong demand for cables.
