In 2024, the wire and cable industry will witness significant developments through market growth, mergers and acquisitions, technological advancements, and challenges. Here is a summary of everything that happened that mattered:
Market growth
The global wire and cable market has continued to expand, driven by infrastructure development, renewable energy projects, and the rise of electric vehicles. The market is estimated to be worth approximately $240.3 billion in 2023, with forecasts indicating a compound annual growth rate (CAGR) of 8.1% from 2024 to 2032, potentially reaching $500.7 billion by 2032 (GMInsights).
Mergers and acquisitions
Prysmian Group: In August 2024, Prysmian completed the acquisition of US-based Encore Wire for $4.2 billion, strengthening its presence in the North American market. This strategic move has led to Prysmian raising its core earnings and full-year cash forecasts (Reuters).
Folex: In October 2024, Volex, a cable manufacturer, attempted to take over its smaller rival, TT Electronics, with a proposed £249 million bid. After two failed attempts, Volex CEO Nat Rothschild appealed directly to investors with an offer of 139.6 pa, consisting of cash and new Volex shares, representing a premium of 76.7%. Despite the attractive offer, TT’s board believes that Volex undervalued the company (The times).
Challenges
The fluctuation in prices of raw materials, especially copper, presented challenges for manufacturers. For example, Indian company RR Kabel reported a 33% drop in second-quarter profits due to increased copper costs and lower demand for electrical goods (Reuters).
Regional developments
Asia Pacific: This region has remained an important market, and is expected to grow from $104.2 billion in 2024 to $170.7 billion by 2029, driven by rapid urbanization and large-scale infrastructure projects (Globe Newswire).
north america: Investments in renewable energy and grid modernization continue to drive demand for advanced cabling solutions, including high-voltage direct current (HVDC) Cables and smart network compatible cables (GMInsights).
Notable projects
Champlain Hudson Power Express (CHPE) has forged ahead in the US, awarding companies such as Southwire contracts to supply underground power cables (Wire Tech).
CHPE is a transmission project designed to deliver 1,250 megawatts of renewable hydroelectric power from the US-Canadian border to Queens, New York. This capacity is sufficient to supply energy to more than one million homes. Southwire was awarded the contract to supply some of the underground power cables for this project, in collaboration with NKT, the project’s turnkey cable supplier and system technology owner.
The SunZia transmission project is a 550-mile HVDC transmission line carrying 3,000 megawatts of wind energy from New Mexico to markets in Arizona and California. It is one of the largest renewable energy transmission projects in the United States and aims to decarbonize the Southwest power grid by integrating large-scale wind energy. In 2024, production began, and the project is expected to finish in 2026.
Geopolitical tensions
Escalating geopolitical conflicts, especially between major economies such as the United States and China, have led to increased trade protectionism and export controls. The United States and China are competing for dominance in strategic sectors such as renewable energy, 5G infrastructure, and artificial intelligence. These measures have disrupted traditional sourcing methods and prompted companies to re-evaluate their sourcing strategies, often seeking to diversify suppliers to mitigate risks (Financial Times).
Labor disputes
The latter half of 2024 saw significant labor movements, including strikes at major ports and manufacturing centres. These disruptions caused production and distribution delays, highlighting the need for companies to build more agile and flexible supply chain strategies (KPMG).
Environmental concerns
Climate change events, such as extreme weather and natural disasters, have increasingly impacted supply chains. For example, droughts affecting major waterways have hampered transportation, while floods have destroyed infrastructure, leading to delays and increased costs (The times).
Strategic shifts
In response to these challenges, companies are adopting strategies such as offshoring or moving production to areas closer to end markets or politically stable areas. For example, Southeast Asian investment has increased as companies seek to diversify their industrial bases away from China.time).
Material prices
As of the end of 2024, prices of major industrial metals such as copper and aluminum have witnessed notable fluctuations due to different market dynamics.
copper
Current price: About $4.08 per pound.
Market dynamics: Throughout 2024, copper prices will be influenced by global industrial activity, supply constraints, and demand from green technologies. In the first quarter, prices were around $8,500 per metric ton, rising to $9,000 per metric ton in the second quarter due to supply constraints and strong demand (Artistic star).
Supply and demand: Analysts note a slight supply deficit in the copper market, with an expected shortfall of 73,000 MT in 2024. This deficit is expected to support demand-driven prices from energy transition sectors and constrained supply dynamics (Metal News).
Aluminum
Current price: About $2,541.50 per metric ton.
Market dynamics: Aluminum prices have shown a trend toward shortages, which could push prices higher later in 2024. In the first quarter, prices were around $2,250 per metric ton, rising to $2,300 in the second quarter, with expectations to reach $2,450 by the fourth quarter. (Metal News).
Supply and demand: The global supply of refined aluminum is expected to expand by 2.7% in 2024, with the market expected to be broadly balanced, leaning toward shortages that could lead to higher prices (Metal News).
Market influences
Industrial activityThe expected decline in global industrial activity, especially in China, the United States and Europe, is expected to weigh on metal prices. Analysts expect that this contraction may lead to a decline in the prices of metals such as copper and aluminum, affecting the profits of major mining companies in 2024 and 2025 (Market monitoring).
Energy transmission: The global trend towards electricity and renewable energy continues to boost demand for metals such as copper Essential for energy infrastructure. This continued demand is expected to support copper prices, which could push them to record levels (The times).
Trends across the industry
Transport electrification: The increasing adoption of electric vehicles (EVs) is impacting multiple sectors, including electrical equipment manufacturing and construction. There is a growing need to develop EV charging infrastructure, which relies heavily on advanced cabling solutions (Kidbrooke).
Energy storage solutions: Advances in energy storage technologies, such as batteries and supercapacitors, are critical to the integration of renewable energy sources and the stability of smart grids. This advancement is increasing the demand for specialized electrical components and systems (Global sources).
