China's wire and cable industry is big but not strong

China's wire and cable industry is a big but not strong industry consensus. Although it has become the world's leading cable industry, with annual output of more than one trillion yuan, China's wire and cable industry still has many problems. There are many problems that experts in the industry have talked about, but in these issues, what is the biggest drawback of China's cable industry? Some people may say that "unfair competition in the market is unfair", others say "not paying attention to quality and technological innovation," and others say "lack of professional talent." The disadvantages that more people have said are: "The price of raw materials remains high, Lead to very low profits."

“The high raw material prices have led to extremely low profits.” Among all these answers, one of the bottlenecks that convinced the author most about the rapid development of the Chinese cable industry is this. Some people say that professionals, some people say that too many shoddy products, etc., if the price of raw materials declines, the profits of cables increase, in fact, these are not a problem, if the raw material prices fall, who still needs to create a shoddy product to win profits; If the price of raw materials declines, the profits of cable companies will soar, and training professionals is not a problem. If the industry’s profits are low, what talents are willing to engage in this industry? Therefore, in the final analysis, it is still necessary to lower the prices of raw materials and raise the profits of enterprises, which is why quality and talent are discussed.

Copper is the most important kind of raw material for wire and cable, which accounts for 70%-80% of the total production cost. Therefore, reducing wire and cable raw materials actually reduces the price of copper. All along, China's cable industry uses copper as the raw material of the cable core, but China's copper resources are not many, and the recent increase in the price of copper has led some cable companies to produce cables that compress raw materials. Cables are even more unqualified, and they simply cannot compete with some big brands and foreign cables. Therefore, if the price of copper is not reduced, the development of China's wire and cable industry is difficult to achieve. This shows that how to reduce the cost of raw materials is not only the key to improving the profitability of cable manufacturers, but also the key to improving product quality.

However, from the actual situation, reducing the price of copper is also an impossible matter. China’s copper resources are poor, and copper is China’s second-largest strategic material after oil, with an import dependency of as high as 60%. China is already the world’s In the largest wire and cable manufacturing country and consumer country, the total amount of copper used in China's wire and cable industry was 5.1 million tons in 2012, which accounted for 68% of the total domestic copper used in the country. The amount of copper used in the industry was 2.83 times that of 2000. In 2012, the total amount of copper used in China accounted for about 1/3 of the world. Therefore, China has long been forced to import large amounts of copper, including refined copper and copper ore. In the face of huge demand, China’s severely deficient copper resources.

The top 10 mining giants in the world control nearly 75% of the world's mine production, while China’s reserves of copper resources are about 26 million tons, and the actual amount of copper used each year is nearly 5 million tons. The United States Goldman Sachs Group expects that China’s copper demand will jump by 8% in 2013 to reach an unprecedented 88.33 million tons, which will increase the total global demand, and cause a shortage of 6,000 tons of supply and demand, and in 2012 oversupply was 21.6. Ten thousand tons.

According to calculations, China's copper resources support up to five years. Due to the scarcity of copper resources, 70% of China's copper concentrates rely on imports, which puts great pressure on smelting companies, causing a sharp rise in costs. According to related companies, each import of 1 ton of copper from abroad will result in a loss of 1,000-2,000 yuan. At the same time, as more and more companies have flooded into cable production, the dependence of the cable industry on copper imports has continued to increase and manufacturing and construction costs have increased.

As the most important raw material in wire and cable, the price of copper has risen too fast in recent years, which has overwhelmed the wire and cable industry. Since copper prices cannot be reduced, it is necessary to find a material to replace copper. Also as a kind of metal wire, aluminum has a very rich resource reserve in China, about 2.7 billion tons. Under such circumstances, exploring the use of aluminum instead of copper to produce aluminum alloy cables has become an essential choice for the cable industry in China. It is the only way to break the bottleneck of the cable industry caused by high copper prices and the lack of copper resources in China.

In fact, in Europe and the United States, aluminum alloy cables have been used for many years, and have been developed and used by American scientists since 1968. They have been used for more than 40 years, and their market share in North American countries has reached 80%, which has stood the test of time and history. Aluminum alloy cable passed the inspection and certification of international authoritative organizations such as the United States, Canada, and Australia, as well as China's national cable and wire testing center and other authoritative organizations. Moreover, no matter from raw material production, processing, manufacturing, transportation, installation, operation and recycling, aluminum alloy cable has unparalleled economic and environmental advantages over traditional copper core cable, and is the best alternative to copper cable.

In developed countries in Europe and America, the proportion of aluminum conductors for insulated wire and cable is much higher than in Asia and Africa. In some countries, medium-voltage cables use aluminum conductors. When many churches, hospitals, and government agencies in the developed regions of Europe and the United States used aluminum to replace copper, they used the new cable as the best alternative to copper cables. As a trend, the proportion of aluminum conductors used in insulated cables is continuously increasing worldwide, of which there is no shortage of China.

The use of aluminum core cable instead of copper core cable has many advantages. In terms of investment costs, compared to the same current carrying capacity of aluminum core cable and copper core cable, 35kV aluminum core cable can save costs 40% -60%, 10kV aluminum core cable can save costs 50% -70%, and The larger the cable cross-section, the more obvious the effect. At the same time, in terms of transportation, laying overhead, etc., due to the small diameter and light weight of the aluminum core cable, it is less laborious and labor-saving than the copper core cable, and the matching of cable accessories is also easier to solve. In the distribution network construction project, the use of aluminum core cable can not only meet the requirements of grid construction and development, but also reduce the cost of project construction.

As a new type of energy-saving material, aluminum alloy cable meets the new concept of low-carbon and environmental protection, so one can imagine that in the future development will be more and more widely used. From the government level, this kind of application is also very much welcomed. The Ministry of Housing and Construction, the State Grid, and the National Fire Protection Bureau have widely recognized the use of the new technology in China, and the safety performance and electrical performance of aluminum alloy power cables. The mechanical properties have passed the tests of the relevant departments and all comply with the requirements of the relevant standards. Now China's electric power projects are being gradually promoted and used.

The domestic aluminum wire and cable industry has grown from approximately 600,000 tons in 2000 to approximately 2.3 million tons in 2012, an average annual increase of approximately 23.6%, far exceeding the GDP growth. In 2012, the amount of aluminum used in overhead lines was approximately 1.8 million tons, accounting for 78.2% of the total aluminum used in the domestic cable industry. In the future, the development of aluminum alloy cables will be a major trend.

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