Makers of wire supplies gear up for demand upturn from the automotive and communications sectors by releasing variants with better performance and added value.
China manufacturers of wire supplies are shifting product development to upscale models while offering low-end and midrange versions to cater to both emerging and traditional applications. Many are rolling out units with added value, including special trolley and optical fiber composite overhead ground wires, low-halogen fire-retardant wires and cables, ribbon optical cables and automotive wire harnesses.
Makers of the last are taking advantage of the variant’s rising popularity. In export sales alone, the line posted an annual growth rate surpassing 60 percent since 2007. With demand anticipated to climb by more than 30 percent this year, companies have indicated plans to expand output in coming months.
Enterprises are likewise capitalizing on developments in the communications sector to move up the value chain. With the increasing requirement for higher transmission speeds, many are emphasizing optical fibers to grab more orders. According to the China Electronics News, the country’s output for the category reached 100 million core kilometers last year, a 15 percent jump from 2009. About 20 percent of yield was shipped overseas, and export volume is expected to grow by 20 percent or higher until year-end.
This trend is forecast to persist in the next several years as many developed countries announced plans to invest in fiber to the home. Switzerland’s Swisscom, for instance, will spend about $3 billion on such initiative until 2014. The New Zealand and Australia governments, meanwhile, are setting aside $840 million and $30 billion, respectively, for optical fiber bandwidth networking projects in the next six to eight years.
In China, the communications segment will have a total investment of $294 billion in 2011-15, 36 percent higher than the past five years, according to the Ministry of Information Industry. Up to 80 percent of funds will go to broadband construction, which includes upgrades in technologies such as 3G and 4G.
With these efforts, demand for optical fibers worldwide is anticipated to reach 220 million core kilometers in the next five years. Suppliers are therefore directing R&D efforts toward G.657 variants, which are more flexible than G.652 and meet the requirements of 3G communication. Manufacturers are likewise developing versions with higher transmission speed and capacity, and longer operating distance. New kinds have recently emerged, including all-wave, polymer optical and photonic crystal fibers that feature low loss, wide bandwidth and longer wavelength. Many have indicated plans to invest in these types to strengthen competitiveness.
Regardless of product category, global demand for wire supplies is forecast to rise in the years ahead. Aside from the automotive and communications sectors, the power, electric railway, urban traffic, computer and A/V industries will continue to generate orders for the line.
In recent years, China’s total sales experienced a growth rate of 15 to 20 percent. Revenue reached $102 billion in 2010, and the figure is expected to increase by more than 15 percent this year. To sustain development, companies are shortening delivery time and allowing small volume orders to attract both domestic and overseas customers. They are also improving pre- and aftersales service through close cooperation with buyers and responding to feedback more efficiently.
At present, there are over 2,000 providers of wire supplies in China. More than two-thirds of them are local operations and the rest invested by enterprises from Japan, the US and Europe.
Currently, fewer than 30 overseas-invested companies account for 80 percent of output of upscale models, while the majority of domestic vendors concentrate on low-end and midrange units.
The bulk of yield consists of copper wires and optical fibers, and more than half is shipped overseas. The major export destinations are North America, Europe, and East and Southeast Asia.
Products from China are mainly used in electrical and data transmission, and can be categorized into bare and winding wires, power and communication cables, and electrical wires and cables.
Bare types have only the conductor and do not need shield and insulation material. Winding variants are mainly applied in transformers and coils.
Power cables are available in a range of voltage. Some are rated below 3kV. Midlevel models are between 3 and 35kV. High- and superhigh-voltage versions, meanwhile, deliver 110kV and 275 to 800kV, respectively.
Communication cables are used for data and signal transmission, and have high capacity and stability.
Electrical cables and wires generally support a withstanding voltage of 450/750V, 600/1,000V, 6,000/8,000V, 8,500/15,000V or 15,000V and above. They are fire- and water-resistant, do not contain halogen, and have low smoke and protection against high temperature and termite.
Twisted-pair models are mainstream in this category. These are divided into shielded and unshielded kinds with 22 to 26AWG wires. Cat 5, 5e and 6 versions are also popular, and account for 70 percent of some manufacturers’ total output. Makers such as Hangzhou Xitianqi Electron Co. Ltd plan to direct R&D and production toward Cat 6a in 2011-12.
Optimistic demand for copper wires will continue increasing, enterprises project China’s export volume will rise at a rate of 10 percent until next year.
In data transmission, optical fibers are forecast to replace copper wires gradually because of their faster speed and better performance. Both single- and multimode models of the first are available from China. For the former, the general type G.652 and the nonzero dispersion displacement variant G.655 are the mainstream.
Although G.655 costs twice more expensive to produce than G.652, it has a better dispersion compensation property, making the overall operating costs 30 to 50 percent lower. Many suppliers are therefore concentrating on this variety and its upgraded version. The latter boasts a larger effective area and lower dispersion slope, rendering it suitable for applications requiring 10Gbps speed.
Multimode optical fibers are suitable for short-distance Ethernet transmission. The two major kinds are 50/125μm and 62.5/125μm.
Copper, aluminum and plastic account for 80 percent of the total costs of making most wire supplies, including copper wires. Optical fibers, meanwhile, are largely composed of preform rods, which are produced through chemical vapor deposition.
China’s consumption of copper rose to 450 tons last year from about 300 in 2006. Due to great demand, spending has been increasing significantly in recent years. The cost of other components, including silicon tetrachloride, and helium and hydrogen gases, has also been in an upward trend. Combined with higher transportation and labor outlay, this forced many makers to raise prices in the last two years. The adjustments, however, were limited to less than 10 percent.
In coming months, most companies forecast material outlay will not fluctuate much, and will likely keep quotes at current levels. Even so, many are planning to lower production spending to boost competitiveness. Some will improve manufacturing techniques through advanced automatic equipment and lower defect ratios to realize higher efficiency. Others will source materials and components locally to secure more favorable rates.
Note:This article was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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