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The global wires and cables market size was USD 181.28 billion in 2021 and is projected to grow from USD 200.23 billion in 2022 to USD 294.73 billion in 2029, exhibiting a CAGR of 5.7% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -8.8% in 2020 as compared to 2019.
A wire is a single electrical conductor, whereas a group of wires bundled in an assembly is called a cable. Various cables, such as coaxial cables, are widely used for transmitting electric power and communication signals across industry verticals. Increasing investments in transmission & distribution of electric power and growth in demand from data centers and the telecom industry will drive the wires and cables market growth during the projected period. High cash inflow in smart grid projects and up-grading power transmission systems are also expected to boost the demand for wires & cables. Significant investment in smart grids has resulted in an growing necessity for grid interconnections; additionally, rising funds in underground cables and progression in renewable energy have escalated the adoption of wires and cables.
Disruption in Industrial Activities Incites a Major Halt in Global Wire And Cable Demand In 2021
Amid COVID-19, industries across the globe, such as automotive and aviation, have been experiencing a negative impact on their business. Manufacturing activities are generally considered essential as they drive the industrialization of underdeveloped economies globally, and therefore, they have been mostly exempted from the lockdown measures. As a result, the demand for wires and cables has remained stable in this sector. The spread of COVID-19 poses a significant threat to the global industry.
Emerging economies such as China and India are the major countries for establishing new power plants, increasing focus on building smart infrastructure, and introducing advanced communication facilities, thereby stoking the uptake of wires and cables. The COVID-19 spread pushed China and then India towards a lockdown, resulting in disruptions across the supply chain and significant delays in a new installation in the offices and commercial applications, which has hampered the growth of the cable industry.
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Increasing Demand for Renewable Power Generation to Aid Market Growth
Governments have implemented vast targets to deploy green energy technologies to reduce dependency on fossil fuels. Adherence of various nations to exceed the required objectives will likely provide a great opportunity for the market. The increasing setup of wind turbines and solar farms has increasingly led to the growth of requirements for wires and cables. According to the IRENA, the world's renewable energy capacity has risen from 2,542,035 MW in 2019 to 2,802,004 in 2020, portraying a 10.23% increase year-on-year.
Moreover, there has been a growth in offshore renewable technologies like offshore wind farms. The offshore wind turbines are connected to power cables that must be buried in seafloors to transmit power. Further, subsea umbilical cables are also required for the constant maintenance activities of these wind turbines. Similarly, solar PV is installed on water instead of land in recent times, called the floating PV. The floating PV system is fixed on a floating platform with an anchoring system in water bodies and is connected by subsea power cables. The increasing reliance on renewable energy has led to massive development in renewable energy infrastructure worldwide, which has increased the demand for wires and cables.
Growing Demand from Data Centers and IT Facilities to Favor Market Growth
Data centers are essential to IT services, communications, and networking. Data centers are heavily relied upon for data storage and routing traffic through them. Due to the growth of Big Data, data centers are now in great demand, and the emergence of Big Data is contributing to the exponential growth of qualitative and reliable data centers. Companies have been preferring cloud storage to cut costs and eliminate the hassle of maintaining data centers that would cost billions of dollars. The growing count of data centers for increased availability, security, and affordable connectivity of IT infrastructure would surge the requirement of wires and cables.
Hyperscale data center deployments is anticipated to be trending in the coming years. AC/DC power, ground, copper, and fiber optic are the prominent network cables that are anticipated to be used in data centers. According to CloudScene data of 110 countries with available information, as of January 2021, there were nearly 8,000 data centers globally, majorly in the U.S. , the U.K., Germany, China, Canada, and the Netherlands.
Increasing Investments in Transmission & Distribution of Electric Power Fuels Demand for Wires and Cables
Increasing investments in the Transmission & Distribution (T&D) sector for effectively transmitting power to different electrical equipment at various stages of the network is a major factor attributable to the growth of the market. For instance, the Indian government has increased total investments by eight state-owned power companies, including REC Ltd, by over 19% to USD 7.86 billion (₹59,990.52 crores) for 2021-22, mainly led by the transmission & distribution sector, compared to the revised estimate of USD 6.59 billion (₹50,311.03 crores).
In September 2021, the government was working hard to spend the overall outlay of Rs. 1.5 lakh crore for implementing smart metering projects across the country to reform the ailing discoms. The government has targeted the installation of 25 crore smart meters by the end of 2025. This is anticipated to propel the demand for wires and cables. According to the World Energy Investment statistics, the investment in T&D infrastructure is expected to rise to USD 6.8 trillion between 2014 to 2035.
Growing Investment in Industrial Sector and Rising Urbanization to Fuel Market Growth
According to the World Investment Report 2021, Asia Pacific exhibited an investment worth USD 535 billion of inflow from foreign direct investment in 2020, which was majorly contributed by China and Singapore. Urbanization is likely to escalate energy demand, resulting in the need for power grid interconnections in densely populated areas, generating demand for various cables.
Volatility in Raw Material Prices to Restrain Market Growth
The primary raw materials required for manufacturing cables are rubber and plastic-based ingredients such as PVC grains. Organic polymer materials are mainly fluorine plastic and silicone rubber, whereas copper is essential for wires. An increase in the price of raw materials, especially copper, directly impacts the wires & cables manufacturer's profit margin, which restraints the market growth.
Raw materials used to manufacture cables have experienced a steep rise after major countries started reopening their economies post-COVID in August 2020. Copper rates dipped during the pandemic, after which have witnessed an increasing trend. Copper was trading at USD 4617.50 / MT on March 19, 2020, on London Metal Exchange (LME) and has continuously shown an increasing trend, with day prices reaching USD 10,724 per tonne on May 10, 2021. Copper prices have been changing in the range of USD 9K-10.5K per MT till July 30, 2021. This price fluctuation can be attributed to rising Chinese manufacturing demand and stimulus package announcements by many countries like U.S. and Japan to support manufacturing.
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Low Voltage Segment to Lead the Industry Size during the Forecast Period
The market is segmented into low, medium, high, and extra-high voltage based on voltage. The low voltage segment dominates the wires and cables market share owing to the wide application of low voltage wires & cables in infrastructures, automation, lighting, sound and security, and video surveillance, among other applications.
The medium voltage segment is projected to hold the second-largest share due to the increasing application in mobile substation equipment, commercial buildings, hospitals, and universities & institutions. Medium voltage wires and cables are widely used for power distribution between high voltage mains power supply and low voltage applications and utility companies to connect residential and industrial complexes, or renewable energy sources such as wind and solar farms, to the primary grid.
The high voltage segment also increases its market share due to growing government initiatives for expanding the grid. It is preferable for power transmission & distribution purposes from utilities and commercial applications. Extra-high voltage cable is mostly used in power transmission utilities and many other industries, including water, airports, railways, steel, renewable energy, nuclear and thermal power stations, and other manufacturing industries.
Construction Industry along with Power Transmission and Distribution Sector to Hold Significant Market Share
Based on end-user, the market is segmented into aerospace & defense, construction, IT & telecommunication, power transmission and distribution, oil & gas, consumer electronics, manufacturing, automotive, and others. Subsequently, various market segments are further subcategorized into different divisions. Demand from the construction segment is increasing owing to increasing electrical applications in residential and commercial establishments. The power transmission and distribution segment are expected to account for a significant share due to increasing investment in grid expansion projects during the forecast period.
The IT & telecommunication segment is projected to observe considerable growth due to the growing demand for data centers and development cables for transmitting the information. The oil & gas segment is backed by the increasing application of high voltage power, automation, VFD, control, instrumentation, and fibre optic cables during operation. The aerospace & defense segment is propelling the demand for wires and cables due to a wide range of military ground vehicles, shielding, and protective covering, airframe point-to-point wiring, and other high-current applications.
Asia Pacific Wires and Cables Market Size, 2021 (USD Billion)
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The industry is analyzed across five key regions, including North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, with further divisions at the country levels. The market size in the Asia Pacific rose from USD 68.94 billion in 2020 and stood at USD 75.26 billion in 2021. Countries such as China and India are significantly increasing investment in expanding their transmission & distribution networks. Besides this, the growing demand for electricity from renewable energy is a major factor attributed to the regional market's growth. For instance, in September 2019, the U.S. EIA anticipated that over half of the global energy consumption increase will incur from Organization for Economic Co-operation and Development (OCED) Asian nations, China, by 2050.
The market in North America is expected to grow significantly due to the region’s prominent position is attributable to the increasing renewable energy generation and energy efficiency. For example, International Renewable Energy Agency (IRENA) stated that total renewable energy capacity in North America totaled over 392,262 megawatts (MW) in 2020, an almost 8% growth year-on-year.
Europe is estimated to hold the second-largest market share in the global market. The increasing investment in expanding grid infrastructure and increasing demand for renewable power. According to smartEn, a European business association integrating the consumer-driven solutions of the clean energy transition, Spain, Italy, Estonia, Finland, Sweden, and Norway have reached nearly 100% coverage of smart meters. Other countries like Denmark have already passed the 80% mark with a plan for further roll-outs, which is expected to create promising growth opportunities for the market in the coming years.
Latin America & the Middle East & Africa markets are projected to observe a considerable growth rate due to huge underpenetrated demand. For instance, the Middle East & Africa industry is expected to exhibit healthy growth due to the increasing investment in renewable projects and grid strengthening projects. In addition, market players in this region are making huge investments, fueling the demand for wire cables across various industries.
Increasing Number of Agreements & Contracts Among Major Players Has Propelled the Global Market
The current market is highly fragmented, with many players delivering a wide range of products at local and global levels across the value chain. Cable manufacturing companies actively participate at the global, regional, and country levels.
Currently, Prysmian Group, Southwire Company, KEI Industries, Sumitomo Corporation, and Nexans are the key players in the market-shaping the competitive landscape through diverse product offerings. However, supportive government initiatives for expanding transmission & distribution projects and growing investments in the telecom industry have increased the number of domestic players entering the market. This is projected to lead to the market's healthy growth by 2029. For instance, In September 2021, the National Smart Grid Mission, Ministry of Power, Government of India announced the budget of Rs. 1.5 lakh crores for the development of smart metering infrastructure. According to the plan, the government targets to install 25 crore smart meters by the end of 2025, the primary target being the installation of 10 crore smart meters by December 2023.
An Infographic Representation of Wires and Cables Market
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The global wires and cables market research report provides a detailed market analysis. It focuses on key aspects such as leading companies, product types, and leading applications across various industries. Besides this, the custom research report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the developed market's growth over recent years.
Value (USD Billion)
Fortune Business Insights says that the global wires and cables market size was USD 181.28 billion in 2021 and is projected to reach USD 294.73 billion by 2029.
The wires and cables market will grow at a CAGR of 5.7% in the forecast period (2022-2029).
In 2021, the Asia Pacific wires and cables market value stood at USD 75.26 billion.
The low voltage segment is expected to be the leading segment in this market during the forecast period.
Increasing investments in transmission & distribution of electric power and growing demand from data centers and the telecom industry are major factors driving the markets growth. However, volatility in raw material prices is expected to restrain the market growth in the forecasted period.
Prysmian Group, Furukawa Electric Co., Ltd., Southwire Company, Nexans, Fujikura Ltd., Sumitomo Corporation, LS Cable & System, and KEI Industries Ltd. are major players in the global market.
Asia Pacific dominated the market share in 2021.
A wire is a single electrical conductor, whereas a cable is a group of wires used for transmitting current and signals in electrical and communication fields. They are used in various end-use industries such as oil & gas, marine, automotive, energy & power, and others.
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