The global high voltage cable market accounted to US$ 28.8 Bn in 2018 and is expected to grow at a CAGR of 6.1% during the forecast period 2019 – 2027, to account to US$ 47.8 Mn by 2027.
The high voltage cable market is led by the Asia Pacific region in 2018, followed by Europe in the second position. The dominance of the Asia Pacific region is chiefly attributed to the rising electricity demand and the vast potential for renewable energy generation. As per the International Renewable Energy Agency (IRENA), the region accounts for more than 50% of the global energy consumption, and energy produced using fossil fuel resources continue to account for more than 85% of this. Despite this, a huge part of the population still lacks basic access to electricity. Power demands are expected to rise in this region majorly due to urbanization, industrialization, offshore renewable energy farms, offshore oil and gas fields, power infrastructure development, and remote area electrification, among other factors. These factors are, in turn boosting the growth of the high voltage cable market in the region. Moreover, Asia Pacific high voltage cable market is foreseen to soar at a prime growth rate during the forecast period.
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Market Insights
Increasing demand for electricity due to industrialization and economic developments
With increasing industrialization and economic developments in developing regions such as APAC, Africa, and South America, the demand for electricity is growing at an impressive pace. China, India, Russia, and Brazil are the four largest electricity consumers among the non-OECD countries, and they represent more than 35% of global electricity consumption. Among these countries, China and India are two of the fastest developing countries, and electricity demand in these countries is mainly dominated by ongoing industrialization activities. Further, the investments in the developing regions would contribute a major share to the global electricity growth in the coming few years, and this will drive the global demand of high-voltage cables in these regions for reliable remote area and temporary power requirements. Thus, increasing industrialization and economic developments are contributing significantly to the growth of high voltage cable market in the present scenario.
Uncertainty in prices of conductor materials
The global cable industry is a prominent consumer of conductor materials such as copper and aluminum. As per International Cable makers Federation, 14.9 million tons of the total ~22 million tones refined copper produced in 2016 was used to manufacture insulated wires as well as cables. Aluminum is another conductive material that is used in wire and cable production, but it holds a smaller share than copper. Hence, the changes in aluminum prices have a lower impact on cable prices compared with copper prices. Moreover, the increasing tariffs on goods imported from China in the US, along with the counteractions from China, might affect the demand and supply equilibrium of various commodities. This could further contribute to the uncertainty in copper and aluminum prices and put pressure on companies using these materials. These factors affect have the potential to affect the growth of the global high-voltage cable market.
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Strategic Insights
Market Initiatives was observed as the most adopted strategy in global high voltage cable market. Few of the recent market initiatives are listed below;
2019: Nexans has qualified its 420 kV XLPE power cable design for use in water depths down to 550 meters create power connection across a Norwegian Fjord. This development offers new possibilities for creating higher voltage subsea links in deeper locations than ever before.
2018: Sumitomo Electric Industries, Ltd. has won a contract for high-voltage underground cables from Electricité du Cambodge (EDC), as part of the Phnom Penh City Transmission and Distribution System Expansion Project. For this project, Sumitomo Electric is anticipated to supply high-voltage underground cables (115kV CVT cables) connecting substations (total distance: 15 km; total cable length: 20 km).
2017: Essex Magnet Wire, a division of Superior Essex Inc., and Furukawa Electric Co., Ltd. formed a joint venture to supply a new type of winding high-voltage wire (HVW) primarily to the automotive industry throughout the European Economic Area.
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