DEVASTATING IMPACT OF COVID 19 ON WIRES AND CABLES

Along with every other sector, be it automotive, education and so on, the pandemic has hit wiring and cabling venture equally and has paralyzed major activities succeeding it.  The pandemic has led to a sharp dip in global wire and cable demand throughout 2020 coupled with reduced static investment, halted commercial and industrial activities and stifling of private consumption and market demand. The global wire and cable demand is estimated to contract by 3.5 pc in 2020, even more than what was forecast initially, that is, a fall by 2 pc.

THE UNITED STATES’ AND
CHINA’S COPING WITH THE SITUATION

All of the three necessary components of global aggregate demand namely- consumption, exports and capital investment, has dipped and keeps on dipping as the containment measures have encouraged a freefall in the manufacturing activities. According to a report of the China Federation of Logistics and Purchasing, global trends saw a slight rise in March to 47.6 PMI from 47.1 PMI in February. For the foreseeable future, China, the largest global consumer of wires and cables, is to see a non congratulatory drop by a margin of 7 pc in its demand this year. 

EUROPE’S COLLECTIVE CAMPAIGN

Likewise, Europe’s demand is estimated to fall by 4.5 pc in 2020. Germany and Italy seem to be facing the sharpest regional dip of all times at 5.5 pc and 7 pc respectively, owing to stumbling construction, industrial, commercial and automative enterprises. But an overall European grid expansion will come to their aid as a pan-continental force to support power cable exigency this year.

Meanwhile, the United States and China have categorically called for delays in successive development in 5G rollout, given the sinking down in optical fibre cabling demand by 2 pc in 2020. Although the big sharks in the market like Luvata, Mitsubishi Materials Co., Tatung Co., Furukawa Electric, Ningbo Jintian Copper Group, Tongling Jingda Electromagnetic Wires Co. Ltd., etc. have anticipated significant growth in the later phase.

According to one of the reports concerning the global copper wires and cable market, a rather impressive elevation is forecast during the five years span (i.e., 2020-2025). The big companies might adopt various organic and inorganic strategies, such as expansions, new product launches, partnerships or joint ventures, contracts and agreements to keep them in the market.

What must be kept in mind while analysing the shortcoming of the pandemic situation and its impact on the cable and wire market is suggested in the following points:

An anticipatory increase in investments in renewable energy projects has been a moving factor in impacting the growth of high voltage power cable market. The key players are hoping for an acceleration owing to the fragmentation in the market.

Talking about the developed economies, the stimulus has been focussed around making the rapid relief liquidity measures quicker and easier compared to the past. Large scale budgetary planning to spending in construction, utilities and industry ought to follow to counterbalance fractured consumer demand as households sought to remain cautious due to probable medical issues. 

China, on the other hand, is likely to announce $394 billion in local government infrastructure agreements, while the United States announces a compelling $2 trillion infrastructure packages amid the Covid 19 crisis. The packages will unduly affect infrastructure intensive wiring and cabling needs through various fragmentations like, low voltage, high voltage and fibre optic cabling.

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