Demand Trends of Wire and Cable in China in the Next Decade

In the next 10 years, the development speed of the cable industry in China will grow at a speed higher than that of GDP, reaching 8%-10% and above. The demand of the cable industry mainly stems from the following factors:

(i) Strong smart grid construction will provide the industry with broad market demand and innovation space The 12th Five-Year Plan's overall goal for grid development is to build ultra-high voltage power grids as backbone grids, coordinate the development of power grids at all levels, and have informatization and automation. , Interactive features, safe and reliable, cost-effective, clean and environmentally friendly, transparent and open, friendly and interactive unified strong smart grid, from the traditional power grid to the modern power grid to upgrade and leapfrog. By 2015, the northwest and northeast sending power grids and the “Sanhua” ultra high voltage receiver grid will be built. The capacity of the grid to optimize resource allocation will be greatly increased. Key cities form a strong 500 (330) kV, 220 kV main grid and 220 kV, 110 (66) kV district power supply network. The rural power network built a 110 kV (66 kV) main grid with a 220 kV substation as its hub, and the county grid and key users fully implemented dual power supply. Basically formed the smart grid operation control and interactive service system, and achieved major breakthroughs in key technologies and equipment. The major changes in the scale and development of power grid construction will bring huge market demand and innovation space to the industry.

(2) The trend of urbanization is an important factor supporting the long-term development of the industry. The process of reform and opening up is, in a sense, the gradual process of the rural population gradually shifting to urban areas, that is, the process of urbanization. During the 30 years of reform and opening up, the urbanization rate has increased from 17.9% in 1978 to 45.7% in 2008, a cumulative increase of 27.8 percentage points, and has achieved great results, but compared with 78% of developed countries, there are still Great potential for development. The Central Economic Work Conference held at the end of 2009 took urbanization as the focal point for expanding the structure of domestic demand, giving new meaning and mission to urbanization. Urbanization and the consequent industrialization trend will bring about long-term rigid demand for the power cable industry and ensure the sustainable development and growth of the industry. The process of urbanization has made the construction industry one of China's pillar industries in the early 21st century. It will provide opportunities for cables used in construction lines and other electrical equipment. Cable demand for high-rise building development: It is expected that at least from the end of the “Tenth Five-Year Plan” period to the “Eleventh Five-Year Plan” period, the country needs at least 2250km of flat cables for elevator cables or 12750km round rubber cables. Demand for cable in the development of urban construction: With the standardization of building design and construction, there are many BV lines, and the cross-section is larger than before. Products with a cross-sectional area of ​​2.5 mm2 and above are widely used. The power line cross-section area for commercial high-rise buildings can sometimes reach 240-300mm2. In order to meet the flame-retardant requirements of the building, there will be 80,000-90,000-kilometer fire-retardant cables and 1-15,000-kilometer fire-retardant cable demand each year. The current usage is far less than this.

(III) Power cable industry benefits from investment in railway investment and metro construction projects In 2010, the state will continue to implement policies to stimulate domestic demand in order to stimulate the economy. Investment in various infrastructures including railways and rail transit will maintain its intensity in 2009. . The National Railway Work Conference pointed out that in 2010, the national railway plans to arrange fixed-asset investment of 823.5 billion yuan, of which capital construction investment will be 700 billion yuan. In the next three years, China will also start construction of a number of new lines. The new railway line will be put into production to 26,000 kilometers, and the annual investment scale will also be around 700 billion yuan. In urban rail transit, as of the end of 2009, some 27 cities are preparing to build urban rail transit, 22 of which have been approved by the State Council. According to the plans for the 22 cities that have been approved, 79 rail transit lines will be built around 2015, totaling 2,259.84 kilometers, with a total investment of 828 billion yuan. The total mileage will be more than the current total investment and under construction. More mileage. The above-mentioned railway investment and subway construction projects will bring huge orders for the power cable industry, and will become the pillar force supporting the rapid development of the industry in the next few years.

(4) The huge space for development of wind power has become a new bright spot for the demand of the power cable market. As the state encourages the development of clean energy, investment is booming. With the formal implementation of the “Renewable Energy Law” in 2006 and the “Eleventh Five-Year Plan for Renewable Energy Development” in 2008, related renewable energy power generation and grid connection, on-grid tariff and cost sharing, financial subsidies and tax incentives, etc. With regard to the improvement and implementation of supporting policies, China’s cumulative installed capacity in 2008 was 12.21 million kilowatts. The newly installed capacity in that year exceeded the sum of installed capacity before 2007. It is estimated that by the end of 2010, the total installed wind power capacity in China will reach 30 million kilowatts, which is expected to catch up. Super Germany and Spain, second only to the United States. In the medium and long term, China's wind power installed capacity in 2020 has been raised from 30 million kilowatts to 80 million to 100 million kilowatts, which will have great potential for future development. The huge space for wind power development has also become an incremental factor in the demand for the power cable market.

(5) Demand for assembly wires in the economic development of the electromechanical industry The auto industry will become a new economic growth point in China. It will bring about rapid development of automotive wire and enameled wire. Industrial development will increase the use of electric motors. It is expected that the winding line will have a steady, low-speed development. It should be noted that the conversion of the motor insulation class from Class B to Class F will accelerate the replacement of the enameled wire. In addition, the improvement of rural living standards and urban construction will drive the further popularization and development of home appliances and provide a market for the further development of electromagnetic wires and other cable products.